Coin Bureau Highlights DeFi Rebound Including Uniswap, Aave and THORChain

The host of popular crypto market commentary show Coin Bureau says that several decentralized finance (DeFi) altcoins are making a comeback. 

Speaking in a recent YouTube update, Coin Bureau’s host “Guy” says that DeFi is making a comeback despite most predicting that crypto has entered a bear market. 

The show’s host noted that non-custodial liquidity protocol Aave ($AAVE) has been rallying as of late due to the project’s launch of a new decentralized stablecoin. 

As reported by The Daily HODL, Guy said, 

As amazing as Aave’s weekly rally appears to be, stepping back you can clearly see that the token remains in a long-term downtrend, though it’s possible we could test the upper limit of the descending channel it’s been in since last summer.

Guy predicted Aave could continue its price trajectory to $120. 

He was also bullish on THORChain ($RUNE), which he said underwent a recent rally after the announcement that developers were working on a decentralized exchange aggregator. He predicted that the coin could experience another speculative pump in the near future once the project is released. 

The show’s host highlighted Uniswap ($UNI) as another DeFi project that has rallied of late. While Guy did not have an explanation for the coin’s price rally, he did note that trading volume on the platform had been creeping higher.

$AAVE is the governance token of Aave, which is “a decentralised non-custodial liquidity market protocol where users can participate as depositors or borrowers.” Depositors “provide liquidity to the market to earn a passive income,” while borrowers “are able to borrow in an overcollateralised (perpetually) or undercollateralised (one-block liquidity) fashion.”

$AAVE is “used to vote and decide on the outcome of Aave Improvement Proposals (AIPs).” Furthermore, $AAVE can be “staked within the protocol Safety Module to provide security/insurance to the protocol/depositors.” Stakers “earn staking rewards and fees from the protocol.”

According to a report by The Daily Hodl, in a video released on July 14,, the Coin Bureau host told the over two million subscribers of his YouTube channel that $AAVE remains undervalued:

Today, Aave’s ecosystem reserve only holds 1.7. million AAVE, according to Etherscan. On the demand side of this economic equation, Etherscan suggests that the number of  AAVE token holders continues to rise and I suspect this is because the AAVE token sticker price has declined significantly, which has made it more appealing to investors who don’t pay attention to market cap.

On that note, I couldn’t help but notice the comments during the last video arguing that Aave was not undervalued because its ticker price was high when AAVE was, and arguably, still is undervalued as its market cap is four times smaller than the total value locked in the Aave protocol. Always remember that it’s the market cap that matters, not the price tag.

However, he believes that the dollar-pegged decentralized algorithmic stablecoin $GHO, which was proposed by Aave Companies on July 7, should increase demand for $AAVE:

What does [matter] is the relative lack of demand drivers for the AAVE token. The AAVE token’s utility is currently limited to governance and staking, which offers an admittedly attractive reward relative to alternatives, albeit with slightly higher risks.

The silver lining is that most of Aave’s supply is in circulation, meaning there isn’t much sell pressure left and this seems to be the rationale behind allocating the interest rates from the GHO stablecoin to the Aave treasury. It reduces the sell pressure for the AAVE token and ensures the protocol’s longevity.

The introduction of the GHO stablecoin should also increase the demand for AAVE since it will make it possible for Aave stakers to mint GHO at near-zero interest rates. The caveat is that an increase in staked  Aave could dilute the overall staking reward, which could weaken Aave’s second demand driver.

As for where the $AAVE price is headed, he had this to say:

The harsh reality is that Aave’s future improvements to demand won’t do much to change the fact that we’re currently in a crypto bear market, but it will help the Aave token rise to astronomical heights when the next bull market comes around, especially if the GHO stablecoin gains serious adoption.

Image Credit

Featured Image by Sergei Tokmakov Terms.Law from Pixabay

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