Aave’s native token LEND dropped by 15% as the entire crypto market bled and affected most of the coins over the past day. following the reports in our cryptocurrency news today, we can see that LEND shed 25% in the past 24-hours.
The coin is far above where it was a month ago but the 15% could affect the short-term outlook for the cryptocurrency. LEND is now trading at levels last seen at the end of August. The cryptocurrency benefited from the DeFi growth which brought LEND from $0.01 to a high of $0.80 in months. Aave’s native token got crushed as Bitcoin and Ethereum slid lower and the leading decentralized finance coin printed a loss of 15% over the past day, underperforming the leading two cryptocurrencies.
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
The strong correction took the coin’s market capitalization under $1 billion after it became the first DeFi coin to hit this milestone. LEND could drop even further as it moves below the crucial support level. The price action could be directed by Bitcoin moving forward as analysts are divided over the future of this cryptocurrency because of the many uncertainties about the macroeconomy markets. The stock market crashed as well and this could send Bitcoin crashing down as it did in March.
LEND could continue the drop in the short-term as crypto investors rush for the exit and will centralized capital in BTC. However, many investors remain long on the Defi coin looking at it from a fundamental standpoint citing Aave’s strong product-market fit. Spencer Noon noted that the fact that Aave has a lot of capital in the products suggests the protocol found “PMF.” What makes Aave different is that it doesn’t have “liquidity mining” that could attract capital in an unnatural manner:
“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.”
Kyle Samani made a similar comment, saying that LEND will be the only coin that he will be investing in the upcoming two years:
“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.”
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