While Q1 2022 was a challenging quarter for almost all risk assets, Decentralized Finance (DeFi) remained resilient throughout the volatility. Although Total Value Locked (TVL), which is the nominal value of crypto assets deposited within defined DeFi protocols, shed about one-third of its value at its January low point, the asset class is once again approaching new highs. Liquid Meta Capital Holdings Ltd. (NEO:LIQD) CEO, Jonathan Wiesblatt sat down with TDR to discuss the macro market and how his company is faring in these boom times.
Inline with the rebound in crypto and many risk assets, many DeFi tokens are once again on an upward trajectory. According to one measure as per Defi Llama, the sector TVL is just $27 billion below its previous high of $256 billion. The move has been led by triple-digit gains by the likes of THORChain (131.9%) and Aave (AAVE), whose price has recently increased by 55.39%.
Even more telling has been adoption rates, which continue to attract new patrons. Data from Dune Analytics indicates that the total number of DeFi users has steadily increased throughout 2022 and currently sits at a record high of 4,563,907 unique wallet addresses. It is the type of growth that CEO Jonathan Wiesblatt predicted would come to pass in February 2022, when risk assets—led by equities—were roiling around the world.
As the leader of North America’s first publicly-listed liquidity mining company, Mr. Wiesblatt has seen this rekindling of growth first hand. In a nutshell, it can be summed up by robust demand meeting maturing fundamentals—and the growth runway should be quite substantial:
We (TVL) are now at around $250 (billion), so we’re almost back to the $275 (billion) high water mark. And then if you factor in the asset erosion that occurred in January and February, the capital that has come back in, has more than compensated for the loss of capital through the market selloff. Right, so, the interest level, the adoption rates, the curve has really steepened in the last two, three months.
Mr. Wiesblatt cited three primary reasons for DeFi’s swift resurgence: 1) industry infrastructure is improving; 2) the technology is improving; 3) products and services offered are getting more robust and diverse.
Furthermore, as per the company’s April 1 press release, the Liquid Meta CEO confirms that capital deployed to the Ronin Network continues to be mined and is generating yield and transaction fees. At this juncture, the capital appears to be safe.
On March 30, it was reported that hackers made off with approximately $620 million worth of cryptocurrency from a network used to process in-game transactions for Axie Infinity, one of the world’s most popular NFT video games.
Click on the embedded link to listen to TDR’s newest interview with Liquid Meta CEO, Jonathan Wiesblatt.