The total value locked (TVL) in the decentralized finance (DeFi) ecosystem steadily holds above $50 billion. Interestingly, this places DeFi’s worth of dollars above some countries’ GDP.
While Ethereum (ETH) is the Web3 leader, dominating the overall locked value by close to 50%, some infrastructure competitors are continuously gathering investor’s and developers’ attention. In particular, Solana (SOL), Cardano (ADA), and Avalanche (AVAX) have been growing their DeFi ecosystem with valuable protocols.
Moreover, these layer-1 blockchains have shown a strong momentum for their native tokens. In each case, SOL, ADA, and AVAX fuel their ecosystem through gas fees and staking demand, which is reflected in their price performance.
Notably, the same thing applies to Ethereum’s native token, Ether, traded under the ticker ETH. As the leading DeFi system grows, so does the value of its base asset, rewarding buyers and stakeholders.
In this context, Finbold retrieved data from DefiLlama and picked the following three top DeFi projects.
Ethereum (ETH)
Ethereum is the first pick, trading at $2,190.57 by press time, down 1.15% in the last 24 hours. Meanwhile, ETH is up 83% year-to-date (YTD) from the $1,196.61 price on January 1.
Ethereum also has the lowest MCap/TVL ratio among the selected DeFi projects. This metric indicates overbought or oversold projects by dividing the total market capitalization by the total value locked of a project. Therefore, lower ratios suggest oversold assets, while higher ratios indicate overbought ones.
In this aspect, ETH has a 9.5 ratio with $28.128 billion in total value locked split among 969 protocols. Ethereum’s TVL is up 15% in a month and shows a 24-hour DeFi volume of $1.83 billion.
Solana (SOL)
Recently, Solana joined the top 5 DeFi projects with close to $1 billion in TVL. With this ever-growing ecosystem, SOL becomes an interesting buy for decentralized finance speculators.
Solana is down 3.66% in the day, trading at $67.26 as of writing. However, SOL is massively up 575% year-to-date from its lowest 2023 price at $9.96.
This fantastic YTD performance negatively impacts SOL’s MCap/TVL ratio at 32.72, suggesting an overbought asset. Nevertheless, this situation might change in the future if Solana continues to bring value to its ecosystem, justifying the token’s increased demand.
Avalanche (AVAX)
Right after Solana, Avalanche is in the sixth position by total value locked and is a promising bet for cryptocurrency investors. The Avalanche DeFi ecosystem has consistently grown while its token AVAX stood behind in price action.
Essentially, AVAX has an MCap/TVL ratio of 15.84 with $900 million in total value locked among 349 protocols. This is just $26 million less than Solana and its 117 protocols. Both ecosystems have surged by more than 40% in the last 30 days.
In the meantime, Avalanche’s native token is priced at $37.03 by press time, up 0.17% in the day. Additionally, AVAX is up 240% since the beginning of 2023, when it was traded by $10.89 per token.
All things considered, all the aforementioned assets are among the most solid DeFi projects in the cryptocurrency market right now. However, cryptocurrencies remain categorized as risk assets, and proper risk management is a must. There are no guarantees of returns, even for the most valuable financial ecosystems.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
