The Decentralized Finance Tokens (DeFi) from Balancer, Ben, Aave and Swissborg have gained enormous benefits from the enthusiasm generated by the distribution of the Compound governance token.
Less than twelve hours after Balancer announced that its BAL protocol governance token was live on the Ethereum’s main network, the price rose from USD 6.65 to USD 22.28. At the close of this edition, the DeFi token was trading at USD 15.60, and there were just over 6 million BAL tokens in circulation.
It is following in the footsteps of COMP, whose value more than tripled this week. Even after today’s price drop, it is still up 135%.
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LEND, REN and SNX soar to all-time highs
According to CoinMarketCap data, the altcoins Aave (LEND), Ren (REN) and Synthetix (SNX) also had strong rallies this week.
LEND, a token of the London-based DeFi Aave lending platform, has shown a 3.900% increase in price since trading below USD 0.01 for almost a year from November 2018. The token first rose to USD 0.05 in May, and then rose to USD 0.16 on June 21.
The newly launched REN and Synthetix, Australia’s leader in DeFi derivatives, showed new all-time highs today. The SNX price rose 40% this week continuing its upward trend of a 100% increase in the last 30 days to reach a historical high of USD 1.61.
Both tokens have been rising since late March after the cryptomonal bloodbath. On June 23, the price of REN reached USD 0.16, respectively, an increase of more than 400%.
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The CHSB token for the Swissborg decentralized management platform is currently trading at $0.14, reaching a new all-time high of just over $0.16 on June 17. For much of 2020, the price of the DeFi token was around USD 0.02.
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Why are DeFi tokens better?
Cointelegraph has reported that many DeFi tokens have been consistently outperforming Bitcoin Trader by 2020. Interest in these currencies has received a boost from the launch of COMP, which has just started trading on Coinbase, and has shown a meteoric rise in price in its first week.
There is also considerable enthusiasm around the concept of „yield farming“ which some publications, including Forbes, have promoted as a means of achieving 100% returns on an annualized basis.
As these tokens work on the main Ethereum network, the expected introduction of Ethereum 2.0 later this year may fuel the bullish sentiment, as it will allow DeFi projects to expand properly. Some believe DeFi could rival the ICO boom in 2017, while others think it is another overvalued bubble waiting to burst.