BTC opened poorly in the Asia session, but reversed with strength later in the day as the Western world woke up. After a few days of focusing on market structure and derivatives, today’s Daily will focus on interesting data points spotted in DeFi.
New DeFi Addresses Hits Yearly Low
The number of Ethereum addresses that have interacted with the network’s DeFi ecosystem rocketed over the course of 2020 and H1 2021. But after a month of negative price action across DeFi tokens, the number of new addresses that interact with DeFi on a daily basis took a big hit.
This exposes an important point with respect to DeFi protocol’s and their reflexivity with price. As prices go up, the number of users and amount of capital flowing in to DeFi goes up. But as prices go down and yield farming returns decline, users start to withdraw their capital and use DeFi less. This was inevitable given the vast majority of DeFi utility currently boils do