BlocksInform
Andre cronje, the co-founder of the Fantom Foundation and the former designer of performance finance, a challenge procedure, is not in agreement with those who say that the challenge is dead and that the period of high yields has disappeared.
Challenge isn't over.
In a Medium post on February 1, Andre agrees that the crypto bear market of the past year impacted activity and forced users to preserve assets, swinging to stablecoins. Even with that, at ad hoc rates, he says, the chain measures and performance measures of various challenge protocols, including in Yield Finance, point towards a potentially undervalued challenge market.
He compares the current yields of various coins and stablecoins, including USDT, USDC, and DAI, an algorithmic stablecoin issued by MakerDAO, with those of early 2020 as offered by Yield Finance.
Daily APR https://t.co/BAcrlUTqrQ$DAI 8.75% dominated by @bzxHQ. Static since they introduced 9% fixed rate, they own it.@USDC ~4% @compoundfinance and @dydxprotocol fighting over dominance.$USDT comfy at 20.75% at @AaveAave (insane)@CurveFinance $DAI strong at 9.11% pic.twitter.com/dtadzP8Wx2
— yearn (@iearnfinance) February 5, 2020
Then, challenge was gaining ground, and the Locked Total Value (TVL) had crossed the billion dollar threshold. At the moment, defi tvl is worth more than $47 billion and, at one point, it was more than $170 billion at the top of the last rally. As of the end of November 2021, the secured credit was trading for more than $69,000.
The start of 2020 was the beginning of an extended bull market that lasted two years until the end of 2021.
Presently, the ETH, USDT, DAI, and USDC real yields are relatively higher than in 2020. Andre noted that it is in a dormant market as a result of last year's losses. , the actual rates of return offered by challenge protocols come from the loan market and negotiation fees.
Currently, Andre believes that all those who had done a short circuit had sold their parts, but did not seem confident about going out, As a result, he believes that current rates of return are "really low" even though they are relatively higher than they were at the beginning of 2020.
Considering this development, he disagrees with people who think DeFi is dead and periods of high yields are long gone. He argues that this claim is based on the comparison of the "current market with an unsustainable and highly illusory market peak, not its growth."
He explained:
If you plot a growth graph on LTV, yield and commercial volume, and flatten the curve to avoid swinging, this is a clear linear growth graph.
Andre says the challenge works as expected and does not need a new story or a "brilliant toy".
Taking Charge
DeFi offers an alternative for users who would not otherwise be involved in traditional funding. The ecosystem includes decentralised trading, assurance protocols, investment platforms, etc.
Because they are dependent upon intelligent contracts, Challenge protocols transfer the check to the end user, in contrast to central platforms such as BlockFi or FTX, whose collapse saw customers lose billions of crypto assets which were in the custody of the exchange.
