Cryptocurrencies
DeFi Shows Cracks as User Growth Slows in Crypto Hot Spot
- Dip in interest comes amid overall tumble in crypto prices
- Assets have dropped about 40% since mid-May, tracker shows
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Red flags are starting to appear in what’s often been the most lucrative and volatile sector of the crypto universe this year.
While the broad 60% or so declines in decentralized finance, or DeFi, tokens are generally in line with the recent plunge in digital stalwarts such as Bitcoin and Ether, a closer look suggests something else is at work. Many of the tokens, which power applications that allow users to lend, borrow and trade crypto without intermediaries, are being hurt by the unwinding of the multiple layers of leverage that underpin the transactions.