DeFi Tokens Are April’s Biggest Losers as Revenues Fall; Memecoins Outperform

DeFi Tokens Are April’s Biggest Losers as Revenues Fall; Memecoins Outperform

DeFi Tokens Are April's Biggest Losers as Revenues Fall; Memecoins Outperform

According to research by crypto exchange Kraken, April was a good month for memecoins, such as dogecoin (DOGE) and shiba inu (SHIB). Decentralized finance (DeFi) tokens like aave (AAVE) and thorchain (RUNE) suffered great losses.

The total value locked in DeFi protocols decreased from $57.5 billion to $53.8 billion throughout the month. This is a drop of about 6.6%.

“In spite of this, it was still the second largest month on record for TVL in DeFi protocols, only surpassed by the $8 billion increase in February,” the report noted.

The top DeFi tokens by TVL are aave (AAVE), yearn.finance (YFI), and Maker (MKR). These tokens saw their prices drop by 25%, 16%, and 12% respectively in April.

The largest losers were UNI, AAVE, and YFI, which fell by 43%, 25%, and 16%.

On the other hand, memecoins like DOGE and SHIB outperformed in April with price increases of 527% and 1,602% respectively. Kraken’s report also showed that BTC dominance increased from 60.4% to 63.2% in April while altcoins lost market share .

The report added that BTC’s price “had an incredibly strong month,” rising by 27% while most altcoins fell. Ethereum (ETH) was the second-best performing major cryptocurrency in April, rising by 12%.

Kraken said that the rise in ETH’s price was due to the “widespread adoption of Ethereum as a smart contract platform and the launch of CME futures.” Kraken also noted that ether outperformed bitcoin in the first quarter of 2021, rising by nearly 70%.

The report added that the DeFi sector saw “a significant pullback” in April as the total value locked in DeFi protocols fell from a peak of $45 billion to $33 billion.

Kraken said that this was due to a combination of factors, including the “Matisse” hard fork on Ethereum, which led to a sharp increase in gas prices, and the rise in interest rates.

The report added that the total value locked in Ethereum’s DeFi protocols is still up sharply from $13 billion at the beginning of 2021.

DeFi projects also saw a drop in revenues, which are earned each time a user conducts financial activity on the protocol with the protocol receiving a small cut of volumes as fees.

Kraken said that this was due to the fall in value locked, as well as the rise in gas prices. The report noted that while DeFi revenues have fallen, they are still up sharply from $12 million in January 2021.

The report said that while most of the top 20 cryptocurrencies by market capitalization are down this month, meme coins like Dogecoin (DOGE), Shiba Inu (SHIB), and Akita Inu (AKITA) are up sharply.

The report noted that while these gains may not be sustainable, they are indicative of the current market mood.

Popular Ethereum-based NFT collection CryptoPunks lost favor among investors, slipping to the third spot by market capitalization as the Mutant Ape Yacht Club jumped to second place with a $2 billion capitalization.

While the DeFi market has seen a correction in recent days, the overall trend remains positive. The report concluded by saying that DeFi “took a step back” in April as TVL declined and many top tokens saw their prices fall.

Martin K
Martin K author check sign Pro Investor

I am a bitcoin and crypto currency writer. I also work as a professional trader, and I have experience with stock trading and bitcoin trading. In my work, I aim to provide clear and concise information that helps people understand these complex topics.