Thread by @mrjasonchoi

Thoughts on DeFi prices

1/ While the dog coins, fancy launch videos and Tiktok memers are finding new and creative ways to bankrupt retails...

Crypto's MOST used projects have been growing at an exponential pace.

2/ Some of the DeFi protocols now generate more fees in a day than #Bitcoin - an almost trillion dollar asset.

These fees are paid by genuine users - NOT staking rewards paid to maintain empty blocks.

3/ The reason behind this growth: in April 2021, we saw a 100x increase in trading volume on decentralized exchanges, versus just 1 year ago.

Even compared to DeFi summer peaks, April 2021 still saw more than 2x the trading volume (!)

4/ In early 2020, seeing DeFi cross $1B in total value locked seemed unfathomable.

Today, more than $80B worth of assets are put down as collateral in DeFi protocols - that's a 80x growth within 1 year.

5/ Those who invest billions in crypto as their full time job recognize DeFi as the vertical with the largest addressable market.

With all the hype around digital art in Q1 you may have thought most of the private funding went to funding NFTs.

You'd be wrong...

6/ Interesting, despite being the most used and fastest growing vertical in crypto, DeFi token prices have lagged the market, particularly $ETH.

7/ Few potential reasons:

- High gas fees drove incremental demand to other chains (see Pancakeswap trading volume vs. Uniswap v2 below)
- New capital were deployed into meme coins
- $ETH rally sucking up all the liquidity as people sell DeFi for $ETH

8/ With L1 chains reaching ludicrous valuations relative to the economic activity generated on them (e.g. fees), DeFi tokens are beginning to look dirt cheap on a relative basis.