Decentralised Finance (DeFi) hot streak in 2019 rolled over into the New Year. The DeFi movement was one of the biggest trends last year in the crypto world and looks set to better its performance in 2020 despite the widespread coronavirus outbreak. So far, DeFi apps have surpassed previous records with the month of March being a particularly good one for the most prominent apps.
DeFi apps post record numbers in March
The number of active unique users were at an all-time high with MarkerDAO and dYdX having 1458 and 586 respectively. The increased activity was also recorded on other prominent apps with Synthetix and Compound having 915 and 630 active unique addresses in March, subsequently becoming some of their busiest days ever.
Individually, the performance of each DeFi app differed significantly, as they were affected by the coronavirus epidemic differently. However, overall the apps posted positive performances as shown by an increase in number of users.
Out of the top DeFi apps, MarkerDAO was the most affected by the March 12 crypto selloff as the sudden fall of Ethereum price had an adverse effect on the DAI’s valuation. The stablecoin lost its peg to the US Dollar by a large margin that in turn placed huge pressure on the existing collateralised loans.
Subsequently, several investors recorded massive losses. However, some keen investors took the opportunity to take up loans at zero cost thanks to Ethereum’s volatility and network congestion. Since then, the protocol usage has suffered considerably due to low investor confidence based on these issues.
Synthetix and Compound benefit from MarkerDAO’s issues
The other DeFi apps remained strong in the midst of the ‘black swan’ coronavirus epidemic. MarkerDAO’s losses were gains for its peers with Synthetix particularly impressing in March. The app leapfrogged MarkerDAO to claim the top position as the DeFi app with most daily users. More impressively, Synthetix has a high retention rate with over 50% of its users sticking to the platform since September last year.
Compound has also gained substantially from MarkerDAO’s misfortunes. Some users have shifted to the platform following MarkerDAO’s proposal to put interest rates on hold. Compound is now the third largest DeFi platform after recording a surge in active users since the turn of the year. The app is becoming increasingly popular due to its attractive interest rates, continuous development and improvements of its governance structure. More impressively, Compound has recorded higher retention rates across February and March thus defying the odds in the midst of the Covid19 crisis.
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