DeFi tokens soar 30% as traders hail ‘friendly’ DeFi landscape under Trump
Some decentralized finance (DeFi) tokens have rallied more than 30% as traders expect the incoming Donald Trump administration to hold signs of “utility” to strengthen their “investment appeal”, according to an industry analyst.
Uniswap (UNI) was one of the biggest winners on November 6-7, rising more than 35% to a local high of $9.58, while Lido DAO (LDO), Athena (ENA), Aave (AAVE) and Maker (MKR) rose from their local lows to highs. Rate over 20%, CoinGecko data shows.
“Until recently, DeFi tokens have largely been labeled ‘useless governance tokens', tokens that provide no value other than voting on protocol changes through governance voting rights,” Charlie Sherry, head of financial and cryptocurrency analyst at BTC Markets, said in comments. to Cointelegraph.
“But investors and token holders are buying into the bet that one day these protocols will be able to return value to the token through the fees generated by the protocol.”
According to Sherry, these “value storage mechanisms” have not been implemented because many DeFi protocols fear enforcement action from the United States Securities and Exchange Commission, pointing to the SEC's investigation of Uniswap Lab as a textbook example.
Trump won the presidency of the United States on November 6, defeating Vice President Kamala Harris. According to 10x Research, this result may cause SEC Chairman Gary Gensler to resign in December or early January.
Together, these may have “sparked a wave of regulatory optimism,” Sherry said.
“[The] Markets are now pricing in the expected regulatory change, expecting a friendly environment for DeFi projects and their tokens.
Top performing tokens in the last 24 hours. Source: CoinGecko
Elaborating further on the value storage mechanism, Sherry said the lending and borrowing protocol Aave's “payment switch” proposal for AAVE token holders is “a big step towards creating intrinsic value”.
Similarly, Sherry said that UniSwap's new Layer 2 UniChen will flow some of the fees to UNI tokenholders – “transforming UNI from a management token to a utility token and broadening its investment appeal.”
Sherry added that the Diffie protocols behind LIDO, ENA, MKR and Frax (FXS) could see similar “cost-conscious” changes.
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Meanwhile, Markus Thielen, head of research at 10x Research, said the Diffie token could rise as some traders adopt a “buy the laggard” strategy – buying assets that underperformed last year to become next year's leaders.
There is speculation that BlackRock may introduce its Ether (ETH) exchange-traded fund “more aggressively” in 2025, Thielen told Cointelegraph.
Thielen Ether may reach $3,000 if it breaks above the $2,700 level.
Ether is currently trading at $2,845, up 8.5% in the last 24 hours.
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