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27.10.2020

This year, the decentralized finance industry has made a real breakthrough in the digital currency market. DeFi coins have increased in value hundreds and even thousands of times over a short period. A striking example is the YFI token, whose quotes increased by more than 100,000%.

However, the faster the rise, the louder the fall – DeFi coins lost ground in the fall. Compared to the maximum values, the YFI token fell in price by 60%, UMA – by 68%, MEME – by 85%, SUSHI – by 96%. Such changes are not a big surprise in the decentralized finance arena.

Nikita Zuborev, analyst at Bestchange.ru, claims that the popularity of this sector has begun to decline, but one cannot be completely sure that it will not return to its previous level. This is evidenced by the high level of load on the Ethereum blockchain. At this time, you should not buy the “sensational” DeFi tokens, but you can pay attention to new ones.

The most popular coins of decentralized finance were not worth buying even at the peak of their popularity, Zuborev continues. All tokens in this industry, except for stablecoins, are overvalued. If you have a strong desire to try to make money in the DeFi market, the best solution would be to analyze some young coins that have a high potential for a rapid rise in price.

The expert is convinced that the most popular digital assets in this area will inevitably continue to decline in value, since there are no prerequisites for a second wave of growth. However, it cannot be denied that the DeFi sector is still extremely popular with investors. The sphere should not be ignored, as you can skip the introduction of very interesting ideas.

Vadim Koleoshkin, the founder of the financial and technical startup Zerion, also has no doubts that the decentralized finance industry has not yet exhausted itself. The expert is convinced that the market was actually overheated – most projects showed tremendous growth even without the test of time. However, the number of players on DeFi sites continues to grow every day.

This time is favorable for a more thorough analysis of protocols and indicators, says Koleoshkin. More than 100,000 people use DeFi every month, but many teams are already thinking about serving over a million customers.

Dmitry Ivanov, director of the Klopenko Group, does not share the opinions of previous experts. He argues that the entire DeFi industry is nothing more than pure speculation, which has been announced more than once. Such a rise in the price of tokens, which in a matter of days could rise by thousands of percent, cannot be called normal.

In times of crisis, the cost will decrease even for the most stable assets, take gold for example. DeFi is an industry where you can make a fortune on the wave of popularity. But it should be borne in mind that with untimely leaving, the probability of losing all savings is high. Investors do not have any guarantees. They will be developed soon, but until then, you should be extremely careful, continues Ivanov.

In September, Messari specialist Qiao Wang spoke of DeFi tokens as the main investment breakthrough over the past ten years. He compared decentralized finance to bitcoin in 2013, but emphasized that the industry is “heavily clogged.” In this regard, you need to carefully approach the choice of projects for investment, otherwise you can lose everything.