The DeFi ecosystem continues to attract more and more funds. Despite the many warnings, some investors do not see DeFi as a bubble.
DeFi is at the heart of the debates
If you follow the crypto loan news, it is impossible to have missed the DeFi phenomenon. In addition to being at the heart of the debates, all the tokens from this ecosystem have experienced a parabolic growth in their price.
Source : Twitter
As shown in the table above published by Taha Zafar, Bitcoin has increased by 81% in the last 90 days against an increase of at least 100% for all the DeFi tokens analyzed.
For many, this sudden rise in prices is comparable to the madness of ICOs that affected the ecosystem in 2017. This is why Vitalik and the CEO of Waves warned of the potential bubble DeFi.
An opinion shared by the venture capital investor, Julien Thevenard, according to which the valuation of the DeFi assets would be much higher than the profits of these. When calculating the price-to-earnings ratio, he discovered that the PEs for DeFi projects were extremely high. In comparison, the S&P 500 has an average PE of between 13 and 15, which is far from the ratio at 4360% of MakerDAO.
What if it was not a bubble?
Although the majority opinion goes in the direction of a bubble in the DeFi ecosystem, some investors are far from being of the same opinion. This is particularly the case for Andrew Kang, for whom this is only the beginning.
According to him, the DeFi ecosystem is still in the discovery phase.
“Despite the buzz, levels of understanding, use and allocation of capital are still low and the potential for increase is high,” he said on Twitter.
A fact which is confirmed according to him with regard to the figures of use. So while DeFi has historically been used by diehard Ethereum users, the trend seems to be changing. He argued that the 6000 daily users of these protocols are proof of this.
Likewise, the funds involved in the ecosystem, although massive, represent only a tiny part of the value held by the 3 main crypto assets:
“The top three crypto assets (BTC, ETH, USDT) have an overall value of over $ 200 billion. The fixed value in DeFi is less than 1% of this amount, but it is increasing rapidly. Coinbase itself retains more than $ 20 billion in assets. “
Andrew Kang also highlights the improvement of the ecosystem as a whole. This applies equally to the level of on-chain liquidity, development tools, the increase in concrete uses as well as the education undertaken within the community.
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