DeFi Activity Subsided by Almost 15% Last Month: VanEck
- DeFi activity has gone down by 15% in August, as per an analysis from asset management firm VanEck.
- VanEck’s MVDFLE Index fell 21% in the month while underperforming Bitcoin (BTC) and Ethereum (ETH).
- Due to investors selling UNI after July growth, the token had a negative performance of 33.5% in August.
- VanEck also noted the growing demand for stablecoins debuted by the Curve and Maker protocols.
VanEck, a global investment manager headquartered in New York, claims that activity in the decentralized finance (DeFi) space has gone down significantly over the past month. As per the analysis done by the firm, multiple challenges along with regulatory uncertainties have resulted in a 15% increase in operations in the developing industry in August.
The analysis from VanEck confirmed that exchange volume in the DeFi space declined to $52.8 billion in August, 15.5% lower than in July. It is crucial to note that the numbers are generated using VanEck’s MarketVector Decentralized Finance Leaders Index (MVDFLE), which works by tracking the performance of the largest and most liquid tokens on DeFi protocols, including Unisawp (UNI), Lido DAO (LDO), Maker (MKR), Aave (AAVE), Thorchain (RUNE), and Curve DAO (CRV).
Additionally, according to VanEck, the index fell 21% in the month while underperforming the leading blockchain networks Bitcoin (BTC) and Ethereum (ETH). The analysis stated that due to investors taking profit from the optimistic performance of UNI in July, UNI had a negative performance of 33.5%.
A key metric for DeFi protocols is the Total Value Locked (TVL), which represents the number of assets that are currently being staked in a specific protocol. According to VanEck, the TVL of the industry fell from $40.8 billion to $37.5 billion (around 8%) in August, marginally outperforming Ethereum’s 10% drop in the month.
In the analysis, VanEck noted that despite August being a poor month for the DeFi industry, significant positive developments were also seen, including Uniswap Labs’ dismissal of a class action lawsuit and the development of the stablecoin from Maker and Curve. After recovering from an exploit in late July, Curve’s stablecoin crvUSD saw significant growth in August, achieving a new all-time high of $114 million borrowed.
“The growth of crvUSD has allowed it to become a significant contributor of revenue for the platform, with crvUSD fees exceeding fees collected from all non-mainnet liquidity pools in 3 of the 4 last weeks,” reads the report.
As earlier reported by Bitnation, multiple DeFi protocols were fined by the Commodity Futures Trading Commission (CFTC) earlier this month. The agency issued cease-and-desist orders against Opyn, ZeroEx, and Deridex, along with fines of $250,000, $200,000, and $100,000, respectively. Moreover, Coinbase CEO Brian Armstrong wants these protocols to take the CFTC to court.