Uniswap (UNI) recovered strongly yesterday and even gained a little earlier today. The top DeFi trading marketplace had a lacklustre last few weeks despite some upwards movement as other cryptocurrency projects stole its early 2021 thunder. However, now the index is back above $26 and looking strong with a market capitalization nearing $16 billion.
Is the DeFi sector back in business with this latest change of trend?
The DeFi sector has largely cooled off after recording some good gains in late 2020 and first quarter of 2021. While Ethereum, Cardano and other blockchain networks also benefitted from that DeFi boom, several marketplaces began to mushroom catering for the sector. Uniswap was perhaps the most important one of them. It was a completely decentralized marketplace that catered for all kinds of coin listings without approval from a centralized decision making or partnerships. It essentially lifted a heavy barrier from the concept of a decentralized exchange and delivered quite well overall. The DeFi sector and trading reached all-time highs in late 2020 and even spurned the rapid growth of altcoins like Ethereum and Cardano, both of which were being used extensively in the DeFi sector, providing a programmable blockchain resource for everyone to work on.
Current State of Things
Currently at press time, UNI is trading slightly above $26 and is looking increasingly confident. However, the DeFi sector overall has been cooling for a while and a decent price increase in Uniswap’s price index cannot jump start it immediately. The recent price increases in Solana (SOL) and Terra (LUNA) cryptocurrencies also show that a second DeFi wave may be in the works but once again, price increase alone cannot recover the sector. The platforms need to first and foremost create a kind of decentralized environment that works for everyone and are free from foreign intrusions and hacks.
The sector was rocked by several high profile hacks including the ones involving the Poly Network, Terra and Solana itself at one point. While the Poly Network hack itself was fully retributed the hacker who even claimed he did it just for the fun of it and even held a Q&A session. Many other hacks were ofcourse unrecoverable and many people were robbed of their precious cryptos. So, the DeFi networks need to step up their game or otherwise the sector will be in danger of becoming a past soundbite.
The Immediate Future
However, that doesn’t mean that a short-term DeFi uptick cannot happen in the near future. We have seen with the rapid rise of Solana and other networks that short-term crazy price breakouts are quite achievable and do happen in the crypto space. Let us see what will happen.
Image Source: publish0X