- Data from Dune Analytics show an increase in the total number of protocol users in Ethereum DeFi with 898,598.
- Trader Aaron Arnold predicts up to a 50-fold increase in major DeFi protocols on Ethereum.
Ethereum’s DeFi is gaining momentum once again. After suffering a correction in the price of its most important tokens and a drop in its Total Value Locked (TVL). Now, this figure shows the recovery in the sector and has reached a new all-time high during the weekend with $13.7 billion, according to DeFi Pulse.
Source: https://defipulse.com/
Data from Dune Analytics also shows a boom in the number of users interacting with different protocols in the DeFi sector. Since the beginning of June this year, the number of users increased by 100% compared to December 2019 to reach 200,000 users and continue the trend to reach 898,598 today.
Source: https://explore.duneanalytics.com/queries/13348#26738
Despite the significant growth, the number of users does not reach 1 million. This indicates that there is still potential for significant growth in the TVL and in the performance of the main tokens. In comparison, the number of addresses with a balance greater than 1 for Ethereum has been steadily increasing since the end of 2019, according to Glassnode data, exceeding 40 million.
Ethereum-based protocols with the highest probability of profit
In that sense, the crypto trader Aaron Arnold has identified the protocols of the DeFi sector that he considers will receive a significant increase. He also relies on data from Dune Analytics to disprove investors who have declared a bear market for the DeFi sector:
I’m here to postulate that the next big alt trend will still be DeFi. DeFi is still in a bull trend, and the trend is your friend. Anybody who says DeFi is dead simply has not been paying attention. Yes, we have seen the degen DeFi food coins flushed out, the tacos, the hot dogs. They are dead… It’s very common in cryptocurrency to go through bubbly periods. Once the bubble pops, then the degen coins get flushed out and the more legit coins, the coins with more staying power, prevail for longer…
Arnold recognizes the potential for major protocols such as Uniswap (UNI), Compound (COMP), Aave (AAVE), Synthetix (SNX), Yearn.Finance (YFI), among others, to offer great rewards to investors. Although he rules out 100x profit, the trader expects these protocols to increase 10, 20, or even 50 times.
While total value locked for individual projects did have a period of going down, for the last 30 days you can look at individual projects – Compound trending up, Aave trending up, Synthetix for about the last 15 days trending up.
Finally, Arnold predicts an increase in the participation of institutional investors in 2021. The trader says that his contacts in exchanges and in traditional finance have expressed “a great interest” in the DeFi sector.