Main page News, Cryptocurrency
Hot topic
July 16, 2020

Despite the fact the DeFi (decentralized finance) sector is gaining popularity during 2020, its earnings are not increasing that much.

According to a recent report shared by Bankless, a newsletter focused on the DeFi sector from Mythos Capital founder Ryan Sean Adams, the industry earnings fell by 42% during the second quarter of the year, from $5.5M in the first quarter to $3.9M in the second.

That's a surprising fact if we take into account that the price of a large number of DeFi tokens has risen significantly recently.

It looks like this data mismatch between token prices and projects earnings could be due to several reasons. Firstly, the fact that MakerDAO lowered its stability fee (SF) to 0% after the crash of the crypto market in March may have affected it. The Dai Savings Rate (DSR), which was previously at 8%, also dropped to zero as Maker struggled to keep the dollar peg at the right level. The Dai token peaked at $1.08 during the crisis, so the Savings Rate was reduced in order to encourage borrowers to mint more Dai to sell into the market.

As a result, Maker's earnings collapsed from $1.2M to $150K.

However, Maker does not seem to be the only project to blame, as the excessive earnings reported by Synthetix during the first quarter have also affected the industry. So in Q2 it reported $267,000 in earnings, down from the $2M from Q1.

Subscribe to our Telegram channel to stay up to date on the latest crypto and blockchain news.

Read also:
Strawberry Cake Media Corp. © 2024 Cookie Policy Editorial team Archive

ihodl.com is an illustrated edition about cryptocurrencies and financial markets.
Every day we publish the best materials for everyone interested in economy.