Max Bronstein is an institutional sales and coverage officer for Coinbase, the leading U.S. crypto exchange, and former growth expert at Dharma Protocol. He analyzed the earnings statistics of the top-level decentralized financial applications.
In the shadow of price rallies
Mr. Bronstein studied the numbers of the TokenTerminal data vendor. He outlined that the dynamics of DeFi earnings are out of market focus, while the price performance is in the spotlight. However, total annualized DeFi earnings surpassed the $40-mln level and are 150% on the year.
Too much of the market's focus on DeFi has been about price, rather than the feature that gives many of these tokens intrinsic value: earnings.—Max Bronstein (@max_bronstein) July 26, 2020
Annualized DeFi earnings are up nearly 150% on the year, standing at $42 million USD today. pic.twitter.com/n5wZjyohEp
Thus, it seems that the segment has fully recovered from the tremendous free fall of Crypto Black Thursday in March 2020—at least, in terms of annualized earnings.
The still-in-progress month of July 2020 is shaping up to be one more crucial period for the DeFi ecosystem. The annualized earnings statistics have witnessed two impressive week-to-week upmoves in a row:
Week/week change had its second highest ever print, with two consecutive weeks of 50% week/week on growth in July.
This amazing run has its obvious leaders. Speaking about the most popular types of DeFi applications, Mr. Bronstein stressed the importance of decentralized exchanges (DEXs) and liquidity mining instruments. Uniswap Protocol, Synthetix (SNX), Compound (COMP) and Balancer (BAL) are the champions in terms of annualized returns.
Difficult path of DeFi adoption
Mr. Bronstein concluded that these statistics demonstrate how attractive this segment can be for different sorts of venture capitalists:
It's an exciting time for value-based crypto investors.
However, in a comments section below the post, some followers of Mr. Bronstein highlighted the obscure and poorly regulated nature of the modern DeFi market:
Any of this platform is regulated. It seems like you are giving away your money applying to them.
As covered by CryptoComes recently, angel investor and ex-Messari analyst Qiao Wang emphasized that the complicated UI/UX landscape of decentralized financial applications is a barrier to its mass adoption.
Also, investor and crypto researcher Dovey Wan, founding partner of Primitive Ventures, claimed that in terms of DeFi, the "mass adoption" narrative should be replaced by "ETH chad adoption" or "whales adoption" due to the specific nature of the sphere.