The recent market situation in the currency circle can be described in six words: Defi for success and Defi for failure.
Beginning in June this year, under the leadership of Compound, the Defi tide is coming. In just a few months, the market value of Defi, which has a market value of less than one billion yuan, has been increased to more than 80 billion today. From the trend point of view, we can feel the market's enthusiasm for Defi, but from the current results, the concept of Defi is indeed over-hyped, so that the bubble is a bit big.
The projects that have fallen so badly have now fallen by 90% of their market prices. Projects that performed better have also dropped 30% of their prices. The average decline reached 60%.
Curve is currently ranked first in the ranking of declines. In terms of the Curve project alone, it is actually a very promising project. Because not only the cryptocurrency market, even for the traditional financial market, stablecoins are a huge market. In this market, there is a huge demand for stable currency exchange.
It can be said that the starting point of Curve is no problem. But the problem is that the market distorts the value of Curve tokens. In the cryptocurrency industry, it does not mean that the project's market is large, and the project's token price will be high. Let's take Curve as an example:
From the previous official introduction of Curve, we can know that CRV has four uses, namely:
1. Governance voting (with time weight, the weight decreases as the unlocking time approaches)
2. Value capture mechanism (incentivize specific token pools)
3. Lock-in incentives (incentivize long-term liquidity providers)
4. Cost destruction (decision based on future governance)
From these four uses, we can find that the real value of CRV lies in governance voting and cost destruction. These two functions can be regarded as the core functions that currently support the CRV price. The value capture mechanism and lock-in incentives are both positive incentives. These two uses essentially do not have the effect of keeping the value of CRV, but it is precisely the reason why CRV has fallen sharply.
For people with large funds, it is relatively easy for them to obtain CRV. If a large number of tokens are not of much value in your hand, it will be useless except to smash the foundation. After all, for miners, mining and selling is a routine operation. If the CRV consensus is not strong enough, then there will inevitably be a plunge.
For other Defi projects, they are all similar. As long as the application scenario of the token is not enough to support the value of the token, the price of the token can easily plummet. This is also the reason why the currency price of Defi projects has plummeted.
The current situation in the cryptocurrency market also confirms V God's original prediction. Vshen felt that the Defi market was developing a bit aggressively earlier, and there was a huge bubble in the market. Just last month, V God reminded everyone again: Defi's income is as unsustainable as the central bank's crazy money printing, and the bubble will eventually burst. It seems that this bubble has indeed begun to burst.
of course not. Defi is no problem in this direction. Although the token price of the Defi project has fallen sharply at present, judging from the market value of the Defi market lock-up, this market has not shrunk, and it is still growing. This means that everyone has a real demand for Defi.
For the development of the financial industry, the so-called financial inclusion is to allow people all over the world to participate. The goal of Universal Finance is to lower the barriers to financial access, so that those who cannot enjoy Cefi services can enjoy high-quality financial services. This is also an important goal that Defi wants to achachiev.
