- DeFi sector returned with more strength than ever in early November, after more than a month of stagnation.
- The sector saw a significant drop in September, with many of its projects losing price value and TVL.
- Now, however, the institutional interest is giving DeFi a second wind, and the sector is thriving.
The DeFi sector saw a major explosion earlier this year, and particularly over the summer. However, since then, it hit a period of stagnation, and then it even saw some losses. That appears to have changed now, as institutional money started arriving into DeFi’s TVL (Total Value Locked), thus giving the sector a second wind.
Institutional Investors Finally Approaching Decentralized Finance
Cryptocurrency market data aggregator, IntoTheBlock, recently noted a number of transactions of more than $100,000 heading towards DeFi projects. Transactions including this amount or higher surged by 282% this last week, and two days ago, on November 10th alone, the amount that entered DeFi projects exceeded $134 million.
By tracking on-chain trx >$100k, we can confirm that they have increased by 282% in the same period, reaching $133.72m yesterday pic.twitter.com/tmawHOw9zg
— IntoTheBlock (@intotheblock) November 11, 2020
Another crypto market analysis company, Messari, confirmed the findings. It also noted that the top-performing token seems to have been YFI, followed by yAxis, Loopring, Akropolis, and Curve.
However, while Messari tracks a total of 41 DeFi tokens, it only noticed such major increases in 11 projects over the past 30 days. In other words, this return of the DeFi is recent, and rather selective.
The Recovery of DeFi
Earlier today, the company managed to identify Polychain Capital as the 10th-largest holder of YFI. Interestingly enough, this company did not hold a single yearn.finance token on until October of this year. Now, it holds 1.6% of its total supply, which translates to around 470 YFI.
And that’s not all, as Polychain also started buying and holding a number of other major DeFi projects, such as Compound, Maker, Filecoin 0x, and Orchid.
However, YFI continues to dominate, and it is also the token that saw the largest rebound. Initially, it crashed by 80% between mid-September and early November, going from $43,300 to only $8,550. Now, it surged by 95%, reaching the price of $16,600.
Another piece of evidence that confirms that institutions are interested is the last month’s survey, published by Crypto.com. The survey gathered the thoughts of 411 decision-makers from traditional financial institutions, and 58% of participants said that they were concerned about losing a competitive advantage if they continue avoiding DeFi.