Cryptocurrencies associated with decentralized finance (DeFi) protocols have been rapidly losing value over the last few weeks, so much so Binance’s DEFI Composite Index is down over 50% since it was first launched.
As Decrypt reports, the index launched by Binance is calculated using weighted averages of a basked of tokens associated with decentralized finance protocols to track their market performance. The index includes Compound’s COMP, Yearn.finance’s YFI, Band Protocol’s BAND, Chainlink’s Link, Maker’s MKR, and more.
After hitting a high of $1,189 on the cryptocurrency exchange, the index’s value has been plunging and its now at $527.
The prices of most of the underlying tokens in the index have been plummeting over the last few weeks, even though interest in decentralized finance seemingly hasn’t. DeFiPulse data shows that there are still over $10 billion locked in these protocols as liquidity miners are still taking advantage of premium APYs created by the distribution of governance tokens.
Some DeFi tokens have already lost half of their value, presumably as liquidity miners have started taking in profits. Yearn.Finance’s YFI, for example, hit a $43,000 all-time high last month, and has since dropped to $19,600 at press time, according to CryptoCompare data. It’s worth noting the total value locked on Yearn.Finance started dropping on September 23, and has since gone from $940 million to $730 million.
Some liquidity miners likely moved to Uniswap, as on September 23 the total value locked on the platform started rising, and already went from $1.73 billion to now over $2.36 billion. After Uniswap launched its UNI governance token, liquidity has increased on the decentralized exchange.
Featured image via Pixabay.
