Ethereum based DeFi tokens show 700% gain in 2020

  • Aave, Synthetix and Yearn Finance are among the top winners on Ethereum defi in 2020.
  • Adam Cochran expects that the charges against BitMEX could also have an impact on the defi sector.

The deFi returns tracker tool of analysis firm Messari shows that profits in that sector live up to the hype it has created. Ethereum based defi tokens hold some of the highest Year-to-Date earnings on the crypto space, despite the market’s last week’s downturn.

What are the best-performing assets on Ethereum defi?

According to Messari, Ethereum’s defi hosts 45 tokens with a reported market capitalization of $5,199,176,962. While the sector has had total losses of 10.41% over the last seven days, the monthly chart still shows a gain of 11.54%. However, year-to-date gains are even more impressive at 700.93%.

The asset with the highest gain since the beginning of the year is LEND, the former token of the decentralized protocol Aave. With a loss of 5.34% in the last week and 0.87% in the last month. In comparison, LEND’s year to date profit is 2,804%. The community has recently approved the deployment of a new governance model and the migration from the LEND token to AAVE. The event has received great support from the community and could a potential reason for a further uptrend.

On the other hand, Yearn Finance’s YFI is the second-highest gainer with 1,557% since the beginning of the year. However, the last week had been tough for YFI, as the chart is showing a loss of 36.10%. Yearn Finance has stood out for offering simplified products for yield farming with a good profit rate. Its latest product is expected to integrate Synthetix, Aave, and Chainlink. Therefore, it could remain a top contender to be the most profitable defi asset at year-end.

On the third position is Loopring (LRC) with 784%, followed by Melon Protocol (MLN) with 781% and Ren (REN) with 726%. Synthetix (SNX) shows a gain of 547% gains and AirSwap (AST) a gain of 545%

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As reported by the CNF, last week’s correction in the market has been motivated by the CFTC’s accusations to the BitMEX board. According to analyst Adam Cochran and other experts, the regulator’s measures could apply to the defi sector under the Bank Secrecy Act and could therefore be a threat for the defi ecosystem. The purpose of this law is to stop money laundering and can be applied to individuals, entities and financial agents, according to Cochran.

Therefore, the team behind protocols like Yearn Finance and Uniswap could be subject to charges related to that law, what ultimately could have caused the losses for the major defi tokens over the last week. In addition, Cochran explained that there are material resources (servers, internet domains, financial activity) that can be taken over by the authorities. The expert added:

The take away here is that a protocol isn’t outside the reach of the government, there is always pressure points that can be applied. While defi *MAY* be in a grey area with *SOME* regulation, it is clear that the BSA still applies. They won’t turn a blind eye to Defi. And while it will be hard for them to pursue (and won’t happen right away), they will find new tools and new pressure points to make sure the BSA is applied.