The cryptocurrency market finally has a depth: the reason why DeFi has not crashed

in LeoFinance4 months ago (edited)

The hot market in previous years was the last star project that broke out and ended, marking the end of the market. But this year, star projects one after another, one after another collapsed, but soon the next one will continue...

Will it collapse?

It's hard to judge, it's really hard to judge.

In the past, whenever there was a collapse, the pie fell together. This year is not good. Every time a hot coin needs a major adjustment, the pie is rising and sucking blood, making you feel that the market is still not over and the red flag is still strong.


Everyone is judging that the unlimited number of coins issued by mining will not last long, and even the farmers themselves don't know who is taking it, but someone is taking it all the time. Many projects are destined to be the highest point on the opening day from the beginning of the market, but there are still many people who take it. This actually shows one thing: the depth of the cryptocurrency market has begun to grow.


A joke we often make is "one day in the currency circle, one year in the world", followed by "defi one day, one year in the currency circle". In fact, this is the reason why a certain hotspot concept is not deep enough. When a hotspot comes out, it will be over after a few groups digest it. There is no depth at all, so naturally it will not live long.

To put it bluntly, a financial game, when everyone understands the rules and loopholes, then the game is over.

What is the depth of the market? Before the financial crisis in 2007, the piles of rubbish packaged by the financial elite (pianzi) turned into risk-free real estate wealth management products in front of users. This is called depth and length.

So is the stock market, and so is the fund. The lowest level of the game does not know the rules and content of the game at all, and feels very enjoyable to participate in the game itself, and does not want to control the game, then the game can last for a long time.

Think about it, do those people who buy wealth management products at the bank really know what the wealth management products are?

The crude oil treasure has not been completely cool yet. Do people who buy crude oil treasure really know why their money is being taken? Of course they don't know, if they know, they might as well go and open the bill themselves.

Do stock traders really know what kind of stock they are trading against in the stock market, and what kind of opponents they are trading against?

They don't know, so they are willing to pay, so that the entire game can continue to be maintained.

If you have been a sickle, you will never be a leek anymore.


Similarly, the cryptocurrency market has begun to deepen.

If a certain cryptocurrency could become popular in the past, then its story must be nice and sexy, from big brothers to small casuals, such as the earliest Bitcoin, such as Litecoin, such as Ethereum. Everyone listens to these stories and wants to make money. Earn together, we must set together.

But this year is very different,

Some stories are great, but some people listen, some people don't. When everyone keeps discovering that things they don’t like but keep on rising, it often means that you have "accidentally" stood at the top of the industry, and you have sufficient information advantages, which led to the fact that everyone did not agree at the beginning. What you don't understand may be something that may be a scam in the future. You know it earlier than most people.

That's why you have the feeling of "who is buying", because there is a steady stream of new people coming in.

Just like when you could mine dozens of bitcoins a day with a graphics card, you would feel that way when you sold it on the market.

"A graphics card can dig out hundreds of bitcoins a day and sell it quickly. What are these idiots doing with this stuff?"-Bitcoin miners in 2011.

This shows that the industry has begun to develop and new people have begun to come in.

The dapp era suffered from this loss in the past. There was no depth at all, and a few groups passed away. The defi era is different. There is really a lot of new blood coming in, so people in our circle have always felt that this hot spot will collapse, and it has not collapsed, indicating that the new funds are faster than the withdrawal speed of the "farmers".


When the depth of this strategy is extended again, you will find that slowly there are no "farmer friends" around you, just like the early Bitcoin enthusiasts and miners were actually in the same circle, but slowly with the development of the times, the miners The circles of, coin speculators, coin hoarding parties, and developers are becoming more and more open and distant.

I don’t know if there are any miner friends around you, maybe there are fewer friends?

As defi slowly develops (if not collapsed), slowly you will find that those projects that have been preserved will have a very high mining threshold, and the rate of return will drop to the approximate average level of the industry, anyway, the annualization is several hundred Thousands will definitely not exist for a long time. The annualization is 50% and the next point

I personally estimate that after all the "dust settles", if DeFi does not collapse (I think it will not collapse if there are practical applications), the entry threshold for liquid mining is about 100,000 US dollars equivalent stable coins. It will probably stabilize at 30-50%.

Both of these data obviously have nothing to do with Xiao San.

Therefore, in the future, it will be difficult for everyone to hear the words "what kind of person is buying", because you may be buying yourself, and it will be difficult for you to reach people who are digging.

The circle of miners and the circle of speculating coins will inevitably become more and more fragmented.


For DeFi hotspot currencies, I generally do not give investment advice, because this thing is in the air, and I can't give advice.

However, the market has reached a consensus, that is, after "you can't buy mining coins", many coins have indeed been oversold. You can pay attention to this.

The total amount is limited, and the inflation ratio is not so exaggerated. High-quality currencies can actually be invested. But the same sentence, if the DeFi concept collapses, the mud and sand will fall, and the decline will be more and less.

Of course, high-quality projects are rare, especially when everyone has adjustment expectations (no one thinks there is no bubble at the moment, right?), after a round of inevitable major adjustments, the currency that can survive , You may not be able to buy it.

So if you also have strong expectations of a crash, don't invest, including Ethereum . If you don’t expect a crash and feel that this is the beginning of an era, then do your calculations. It’s hard to get out of the air every day.

Of course, you can also think of it this way:

If defi collapses and funds return to the big pie, if defi does not collapse, the liquidity of the big pie will slowly be locked in. In short, the big pie wins.

The hoard of coins wins, perfect.


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