DeFi User Numbers are up 55% in Six Weeks Despite Poor Price Performance – CryptoGo!

DeFi User Numbers are up 55% in Six Weeks Despite Poor Price Performance

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The number of users on the popular DeFi platforms has increased up to 55% in the last 50-52 days according to analytics from Dune. This was experienced despite the sector showing poor price performance during this same time period. In October alone, the DeFi users shot up more than 40% in numbers too.

The DeFi Price Stagnation

Ever since DeFi shot to prominence within the crypto/blockchain sector it has seen numerous ups and downs. However, the biggest upside was experienced during the Q1 and Q2 of 2020 when users and price index of the emerging sector rose exponentially while tens of billions of dollars worth of investment poured in. However, the Q3 and Q4 of this year mainly saw a poor performance overall by the sector overall. The worth of major DeFi tokens like UnisSwap (UNI), Trustswap (SWAP), Chainlink (LINK), Hex2T(HEX2T), etc saw major decrease overall.

While this sudden price tank was  expected by the community because of the overinflated levels of trading, the proponents of the DeFi sector believed that after hitting a bottom, these coins will bounce back again. The considerable increase in the worth of Bitcoin in late Q3 and Q4 of 2020 also made many of these platforms and their users hopeful of a big price rebound and back into bullish territory.

However, that bullish scene never came. Major DeFi tokens have been stagnated in place when it comes to their USD pairs. On the other hand, due to the rapidly rising Bitcoin price index, they have posted mammoth losses in their BTC pairs with some coins like Yearn.Finance losing up to 70-80% in value. This has trapped many late DeFi adopters into the the wrong side of the market.

Number of Users Keep on Increasing

The negative blowout from the DeFi winter is still not being felt in new user numbers. In October alone, the number increased from 555,000 to 775,000, an increase of 40% alone. More than 85,000 new users were also registered on these platforms during the first 11 days of this month alone, showing a consistent November so far. The popularity of platforms like Uniswap and Compound keep on increasing at a massive rate.

Verdict

It seems that the DeFi sector is following the Bitcoin’s historical behaviour and consolidating its USD pair while increasing the number of its users. Once significant adoption has been made, it will only be a matter of time before the sector enters its next bull phase. Bitcoin itself languished in bearish cycles for more than 2 years before it finally broke free in Q3 and Q4 of 2020. The DeFi sector would be looking to replicate this pattern on its own.

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DeFi User Numbers are up 55% in Six Weeks Despite Poor Price Performance