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The market cap of DeFi as a percentage of the global currency market cap has fallen to its lowest in three years.
DeFi index as tracked by Coingecko showed that Defi 'Dominance' reached 3 year low falling to 2.81% amidst the recent market sell-off.
This represents the lowest point before "DeFi Summer" kicked off in 2021. The index is mostly made up of DeFi projects on the Ethereum blockchain but also contains projects from other blockchains like Solana and Base.
Perion Lim
With the introduction of ETFs, allowing institutions to gain exposure to digital assets, DeFi tokens seems to be largely ignore by market particpipants. Despite the lackluster interest, DeFi's market capitilization still seats at 70billion, which is around 22% of Ethereum market's cap at the time of writing.
Blockhead
According to The Block, the low interest in Defi tokens could be due to a few factors namely the high Fully Diluted Valuations (FDV) of these tokens as well as the memecoin craze that is on-going.
Blockhead
With high FDV, investors have to be worry about upcoming token unlocks and inflation rate, potentially shunning many of them away. This is the complete opposite of meme-coins which may potentially offers multi-fold returns in a relatively short period of time. However it is still early days to count DeFi out given its potential use case in the tradtional finance industry.
Blockhead
