Decentralized Finance (DeFi) Tokens Market Performance November 2023 | Source: CryptoSlateTypically, when the native token of DEXs like SushiSwap begin to rally, it suggest that investors are increasing moving funds towards DeFi assets that are being traded on those trading platforms.
Hence, SUSHI toping the DeFi gainer’s chart last week, is an indication that more capital could flow into the DeFi market next week. Tokens like Raydium (RAY), Opulous (OPUL) and Venus (XVS) are some rising DeFi tokens to keep an eye on for next week.
How Will Ethereum Price Increase Impact the DeFi Market
DeFi projects are blockchain-based platforms built on the Ethereum smart contract network. They provide a wide-range of decentralized finance service such as, payment, lending, savings borrowing, NFT minting, gaming etc.
In the past, once the Ethereum price rally heat ups and it automatically drives up the price of Gas —the fees that traders pay to carry out transactions on DeFi platforms. This then discourages investors from carrying out economic transaction with Ethereum-based DeFi tokens once Ethereum price increase, and network congestions set in.
However, since the Ethereum has transitioned from Proof-of-Work to Proof-of-Stake, the average transaction fees has been reduced significantly. Also, the emergence of L2-scaling protocols like Optimism and Arbitrum have helped eliminate incidences of congestions on the Ethereum Layer-1 blockchain.
Hence, with the risk of high-fees and congestion eliminate, crypto investors can expect DeFi tokens to keep booming in the coming days even as ETH price enters new peaks.