How is the market searching for logic in the old-school DeFi as COMP and MKR continue to rise in recent days?

Why are traditional DeFi projects like COMP and MKR gaining popularity in the market?

As Compound founder Robert Leshner announced the establishment of a new company, Superstate, which uses Ethereum as a supplementary recording and storage tool to create short-term government bond funds, the token COMP has recently performed strongly, sparking market enthusiasm for the concept of RWA. MakerDAO (MKR) and Aave (AAVE) have both performed well. BlockBeats analyzes how the market views this round of growth and summarizes three types of logic.

Logic 1: RWA. Due to the lack of recent updates from Compound, the market attributes COMP’s strength to RWA. However, MakerDAO’s use of the treasury for financial management of DAI deposit rates (DSR) was introduced as early as 2019. As for Aave, some users have mentioned that Aave, as a larger lending platform than Compound, can obtain Compound’s traffic, and it is also likely to have new narratives of its own.

Logic 2: “Fossil coins.” In addition to RWA tokens, BCH, LTC, and BSV are also strong performers this round. BCH’s strength may come from being included in the US trading platform EDX. Some Twitter users attribute the narrative of these tokens to “Dino coins,” describing them as legacy currencies from an earlier era.

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Logic 3: Expectations of buybacks by project parties and whale purchases. With the MakerDAO’s new proposal to introduce an intelligent destruction mechanism, the market’s expectations for MKR buybacks have become increasingly strong, which may be one of the reasons for its bullishness. COMP has also seen a large number of whale purchases. According to Twitter user Andrew T, a whale collected about $11 million worth of COPM in just 11 days, all of which were obtained from Binance. As for BCH, many Twitter users speculate that the dominant force behind it is Bitmain.

In this rapidly evolving industry, the emergence and cooling of each hot spot often follow the same path, rotating quickly on a monthly, weekly, or even daily basis. Some people believe that the rise of MKR and COMP is a response to changes in the protocol’s revenue structure or proposal modifications. However, observations show that positive factors such as RWA or proposal modifications do not seem to have brought the expected sustained rise in MKR. As some calm users commented, no matter how the market narrative “adapts” to the coin price, users need to have their own judgment. Good stories are the endless source of people’s continuous recharge for their beliefs.

Reference: https://www.theblockbeats.info/news/43292

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