Ethereum’s Staking Feature Sparks Evolution in DeFi Landscape: A Positive Shift for Investors
Decentralized finance, known as DeFi, played a pivotal role in the 2020 bull run. However, recent data from blockchain firm Glassnode suggests a shift in investor interest away from blue-chip tokens like Uniswap and Maker.
Glassnode’s report attributes this change to Ethereum’s enticing staking feature, offering attractive returns of up to 4% APR while reducing risk. Investors can now earn rewards with greater confidence.
The report highlights that the lackluster performance of DeFi tokens over the past two years may be influenced by the emergence of native ETH staking yield. Currently, the DeFi market cap stands at around 12% of its peak in November 2021.
DeFi encompasses various crypto projects aiming to revolutionize traditional finance by eliminating intermediaries and automating borrowing and lending processes, with many projects utilizing Ethereum’s blockchain.
During the DeFi boom in 2020, substantial investments flowed into reputable “blue-chip” DeFi tokens like Uniswap and Aave. However, Glassnode notes that these projects are now faced with competition from Ethereum’s staking feature, which offers steady returns and seemingly lower risk.
Ethereum’s successful blockchain upgrade in April allowed investors to securely lock up their ETH and receive returns for their pledged cryptocurrency. With comparable downside performance and reduced volatility compared to ETH, investors can now enjoy more favorable rewards.
To maintain attractiveness to users, DeFi tokens may need to adopt liquid staking, a feature available on Ethereum. Liquid staking enables investors to swiftly access pledged crypto by providing redeemable tokens representing staked assets that can be moved elsewhere.
While the battle to reignite interest in DeFi tokens may face challenges due to Ethereum’s new benchmark, Glassnode believes the industry is undergoing an evolution. This transformation signals a positive shift in the DeFi landscape, offering investors greater opportunities for rewards and security.
In summary, Ethereum’s staking feature has catalyzed changes within the DeFi space, presenting investors with enticing prospects for growth and stability. The ongoing evolution holds promise for the future of decentralized finance.
Clever Robot News Desk 5thJune 2023
