The decentralized finance (DeFi) markets took a steep drop on October 7. Their combined capitalization lost a staggering 25% as volumes shrunk by 30%. Data shows that the DeFi bubble continues to deflate as Santiment, a crypto market data firm, reported a 25% crash in the market cap of DeFi assets in a single day.
In an October 8, 2021 blog post, Santiment said that daily DeFi token trade volumes have dropped by 30% cumulatively. The recent market leaders Uniswap (UNI), Sushi (SUSHI), and Yearn Finance (YFI) are now the hardest hit with weekly losses of 38%, 51%, and 31% respectively.
“The crypto market has been engulfed in a sea of red this week, with most DeFi blue chips recording double-digit losses over the past 7 days.”
Despite the crypto-Twitter space already declaring an emphatic death of the whole DeFi experiment, Santiment alleges that it has identified ‘whale accumulation’ activity happening around several DeFi assets which include Synthetix (SNX).
Santiment also said that the cumulative value of DeFi assets at the time that they moved last on the MVRV blockchain has plunged to an all-time low which indicates undervaluation at the current price levels.
The recently launched DeFi indexes plummeted to record lows in the past week. Notably, the with Binance Futures’ DeFi Composite Index crashed 20% on Wednesday. That index has now lost 63% from its first day of trading in late August.
On the other hand, TokenSet’s DeFi Pulse Index (DPI) lost 20%. It crumbled to record a record low of $71 and posted an almost 50% retracement since it launched about four weeks ago.