The Ethereum decentralized finance space has been rife with innovation over recent months as developers attempt to attract the largest number of users and value of crypto assets.
We’ve seen experiments like Yam Finance garner literal hundreds of millions of dollars worth of crypto into its contracts with coins like YFI for the Yearn.finance protocol has rallied literally over 100,000 percent in the span of a month.
According to venture capitalists tracking DeFi, though, the best (most reliable) investment in the Ethereum DeFi space may be Aave’s LEND token.
Aave could be the best Ethereum DeFi investment for the time being: VCs
DTC Capital’s Spencer Noon argues that one of the best decentralized finance projects in existence right now is the governance token of Aave, LEND. He notes that even though Aave isn’t running liquidity mining schemes, there is $1.25 billion worth of cryptocurrency locked in the protocol.
As liquidity mining has allowed certain projects to reach hundreds of millions of “locked value” quickly, Aave’s ability to garner over $1 billion worth of interest without such a scheme indicates a strong product market fit:
“One of the best signals of PMF in #DeFi is if a project can succeed w/o extra incentives (liquidity mining). @AaveAave doesn’t have LM yet it’s still one of the biggest beneficiaries of new yield farming activity. At $1.26B TVL and only $759M mcap—the fundamentals are so strong.”
One of the best signals of PMF in #DeFi is if a project can succeed w/o extra incentives (liquidity mining). @AaveAave doesn't have LM yet it's still one of the biggest beneficiaries of new yield farming activity. At $1.26B TVL and only $759M mcap—the fundamentals are so strong. pic.twitter.com/wlAZywY6c7
— Spencer Noon (@spencernoon) August 20, 2020
Multicoin Capital’s Kyle Samani echoed the optimism about Aave and the LEND cryptocurrency, going as far as to call it the only Ethereum DeFi token he would hold for the next two years if he had to choose one:
“If I had to hold a single Ethereum based DeFi asset for 2 years, it would be $AAVE. By far the best combination of: product/market fit, token distribution, community, pace of innovation, and reasonable valuation with upside to go.”
LEND reverses in tandem with rest of crypto market
Although Aave’s fundamentals may be strong, LEND is pulling back with the rest of the crypto asset market.
According to CryptoSlate market data, the price of the Ethereum-based token is down 10.7 percent in the past 24 hours — actually underperforming BTC’s negative three percent performance and ETH’s negative seven percent performance over that same time frame.
It seems that as Bitcoin drags lower, the market is preferring to store value in BTC as opposed to altcoins. This was the case in many previous drawdowns, including the one that preceded March’s strong capitulation event.
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