Ether’s (ETH) DeFi activity has declined in the bear market and the sector faces further competition from Ethereum’s annual staking reward of 4%, according to Glassnode analysts. However, a DeFi narrative is building around liquid staking derivative (LSD) tokens that could revive Ethereum’s network activity.
The percentage of gas consumed by DeFi protocols has dropped from 34% in 2020 to 8% to 16% presently, with NFTs commanding the maximum share of 25% to 30%, according to a recent report from Glassnode.
Glassnode’s supply-weighted price index for DeFi, priced in USD and ETH, recorded a 90% loss since early 2021.
The so-called DeFi “Blue-Chips,” which represents a basket of governance tokens from well known DeFi protocols like Uniswap (UNI), MakerDAO (MKR), Aave (AAVE), Compound (COMP), Balancer (BAL) and SushiSwap (SUSHI), have lost 88% of their market capitalization from the all-time highs of $45 billion in May 2021.
The DeFi blue chip tokens have underperformed ETH during bullish market rallies and experienced a more severe drop than ETH “on the downside during the bear.” The analysts predict that since staking of ETH now…
