DeFi 1.0 Tokens Show Promise in Current Crypto Market, Says Analyst: COMP, AAVE and UNI in Focus
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Crypto analyst Altcoin Sherpa has shared insights on DeFi 1.0 tokens in the current market. The analyst discussed projects like Compound (COMP), Aave (AAVE), and Uniswap (UNI). Sherpa highlighted several characteristics of these tokens that he finds noteworthy in today’s crypto sector.
Sherpa pointed out several fundamental strengths of DeFi 1.0 tokens. He noted their high float and lack of overhanging supply, as most early investors have already exited their positions.
Additionally, these projects remain crucial to the crypto ecosystem, with Aave boasting billions in Total Value Locked (TVL) and Uniswap processing billions in transactions.
The analyst emphasized the enduring influence of DeFi 1.0 protocols. Many new DeFi projects on various EVM chains are essentially clones of these original platforms.
Sherpa explained,
“Obviously there are sometimes new features but the core parts still stay the same.”
Potential for Fee Switches
A key narrative shift for DeFi 1.0 tokens revolves around fee distribution. Sherpa suggested that if these protocols implement fee switches, token holders could receive rewards from the substantial revenue these platforms generate. This development could significantly boost the value proposition of these tokens.
Unlike many newer crypto applications, DeFi 1.0 projects have established user bases and active communities. Sherpa highlighted this as a critical factor, stating,
“They’re also lindy enough to where you can feel pretty safe about many of these staying around for a while.”
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Show more +Technical Analysis Perspective
From a technical standpoint, Sherpa noted that these tokens have been consolidating for about two years. This prolonged accumulation period often precedes strong price movements. However, he cautioned about potential opportunity costs, as the consolidation might continue for some time.
Sherpa shared his personal approach to trading these tokens. He plans to wait for a clear breakout with volume before entering positions.
The analyst explained,
“Probably won’t buy these until I see them do a 2x in price or more and then buy when a clear trend has developed.”
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Shift in Market Sentiment
The analyst suggested a potential shift in market sentiment towards these established projects. He noted growing fatigue with newer tokens that have high fully diluted valuations but lack real communities or users. This trend could drive renewed interest in DeFi 1.0 tokens.
Altcoin Sherpa’s analysis highlights the potential of DeFi 1.0 tokens in the current crypto market. While these projects may not offer immediate gains, their established user bases, essential roles in the ecosystem, and potential for fee distribution make them worth watching for crypto investors.
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