DeFi Dump Begins as Top Tokens Shed 50% in a Week

As cryptocurrency markets continue to pull back, the fastest climbers over the last month are becoming the hardest to fall. DeFi tokens have driven gains across digital asset markets during the rally, and they are now the ones leading the losses.

Over the past seven days, total market capitalization for all cryptocurrencies has corrected 20% from its 2020 and 26 month high of around $400 billion. Bitcoin’s failure to top $12k and Ethereum’s lemming-like fall has resulted in markets seeing red.

Top Six DeFi Tokens Dive

Research by Messari Crypto has observed that it has indeed been a rough week for DeFi with six of the major tokens dumping 50% for the period.

Rough week in DeFi land with 6 assets dipping more than 50% + over the last 7 days

Where are we going next? pic.twitter.com/3vJiqb4xhr

— Messari (@MessariCrypto) September 8, 2020

The Curve Finance token CRV is the biggest loser with a slump of over 65% during the past seven days. According to Uniswap.info, the Curve DAO token topped $50 just after it was launched in mid-August. In chart pattern that resembles one for most altcoins after their 2017 run, CRV has slumped over 95% to under $2 today.

The rest of that ‘over 50 club’ includes Meta’s MTA, bZx Network’s BZRX, Ren’s REN token, Airswap’s AST, and Wrapped Nexus, WNXM. Those are not the only ones as a whole raft of DeFi protocol tokens have been battered over this past week, including BAL, UMA, KAVA, BNT, SNX, YFI, and KNC, all having lost between 30% and 40% over the period.

It should be noted, though, that many of these tokens have surged four-figure percentages this year, so a correction for many of them is healthy.

Sushi Still Slumping

The much-hyped SushiSwap token is faring no better as it is currently down 80% on the week. The weekend shenanigans have done nothing for investor confidence as the SUSHI selloff accelerates. Following its launch, token prices surged to top $11, but in its short-lived existence, they have slumped to just over $2.20 today, according to Uniswap.

The protocol is approaching a migration event that will take it off the Uniswap protocol and onto its own one, which will also entail the transitioning to multi-signature governance wallets.

Recent research by Glassnode asserts that, even at today’s low prices, SUSHI is still way overvalued because of its inflationary economics model. The on-chain analytics provider suggested a fairer price of $0.31 for this yield farming token.