What you need to know about DeFi, NFTs as possible investment vehicles

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Ethereum and Bitcoin have long been the biggest projects in the market, with both considered some of the best investment options in the space. However, with the arrival of new investors in the market, new investment options are also appearing.

In the past, ICOs were the most important thing. Today, DeFi and NFT may have just taken their place. And surprisingly, their performance gives the impression that DeFi and NFTs have become invulnerable to the performance of the wider market.

DeFi on Ethereum?

While a majority of the market is still trading in the red, DeFi protocols have seen their use increase. Stablecoin-centric DApps are currently leading the ecosystem. While Ethereum registered a correction of 14.1%, DeFi TVL (total value locked) on all channels fell only 5%, over the same period.

This means that in recent times the DeFi space has not been significantly affected by changes in the value of ETH.

Ethereum price down 14.1% | Source: TradingView – AMBCrypto

However, although the TVL exceeded its May ATH, the top 5 highest TVL protocols were still far from their ATHs at the time of publication. More specifically, AAVE of 49%, Curve (CRV) of 43.7%, Compound (COMP) of 52.86%, MakerDAO (MKR) of 51.57% and Convex (CVX) of 38.5%.

Their overall market values ​​are well below their May levels.

A huge reason for some deviations from DeFi is also due to the rise in NFTs.

Top 5 projects with the highest TVL in DeFi

What is the impact of TVN?

NFTs emerged as a major trend in space after the emergence of Cryptopunks and Monkeys. In fact, September 8 saw one of the biggest NFT events in history.

Over 18,000 addresses competed to create 7,000 NFTs from a collection called The Sevens. This resulted in the highest average gas price on record, reaching over 5,000 Gwei in just 10 minutes.

Ethereum average transaction gas price | Source: Glassnode – AMBCrypto

Despite the above, the broader NFT market has seen a downturn in recent times. In fact, daily volumes have fallen to around $ 100 million.

One of the reasons is that the major holders of CryptoPunk and Ape (two of the biggest NFTs) have gone into HODLing mode, with fewer transactions recently.

Daily NFT volumes | Source: Dune analysis

That being said, it’s always important to remember that NFTs are still illiquid. Their value depends on the hype and as long as that hype remains, NFTs will have solid value.

Once market interest wanes, alas, their value may also decline. So investors are wary.


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