This Week’s Market Vibe: Calmer and Brighter
The mood in DeFi is feeling a lot more upbeat compared to last week. If the previous weeks were a rollercoaster, this one is a gentle carousel – still thrilling, but not about to make our stomachs drop! The bulls in this market have more than just a sprinkle of optimism as we can see some notable recoveries since the last newsletter.
Blue Chips and Their Shiny Rally
People are buzzing about a “blue chip” rally, spotlighting those household names leading the pack as prices bounce back. And if you’re wondering why they’re called blue chips – it might secretly have something to do with their blue logos! Among the stars of this rally, AAVE and YFI are taking center stage, closely followed by respectable recoveries from Curve and Synthetix. But wait, let’s not forget about Uniswap, Compound, and Maker which barely broke a sweat with their gains.
The DeFi Pulse Index: Hope or Hype?
If you follow the DeFi Pulse index, you’d be pleasantly surprised. However, despite its sparkling performance, I can’t shake the feeling this could be a classic case of a bounce from oversold conditions – a comeback we often see, even in the murky depths of bear markets. It seems everyone is scratching their heads trying to decipher what summer meant for us – are we on a trajectory similar to 2016 or 2017?
A Tale of Two Years
Looking at the past, 2017 had a glorious finish, but don’t forget it also experienced a sweaty cooldown around September-October. On the flip side, 2016 was more like a slow-and-steady snail race that eventually got to its all-time highs. As optimistic as the Twitter influencers wish to be, I lean towards the 2016 forecast.
Google Trends: A Reality Check
Check the graphs, and you’ll see: there’s a bump in DeFi searches from summer, although it clearly lacks the roaring mainstream buzz of 2017. But here’s the kicker: these results come from a standing start; the level of awareness is just not there yet.
Innocent or Ignorant?
This current rally seems to blend the naive exuberance of 2017 with the deafening silence from 2016. Back then, we experienced glaring shortcomings in back-end infrastructure topped with exorbitant fees – another hallmark of 2017. And yet, many folks still haven’t caught on to what’s brewing in the DeFi world.
The Road to Scaling
In this week’s news, the CEO of a prominent exchange candidly stated that not even Ethereum 2.0 may be equipped to handle the new loads of mainstream DeFi popularity. Sounds reasonable given the rigorous requirements of DeFi smart contracts. To sum it up: without significant improvements in scaling, we might just be treading water. Until then, we could be stuck with more “Ponzi schemes” than constructive contributions in this beautifully chaotic DeFi ecosystem.
