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Non-Ethereum Based DeFi Tokens Show Resilience Amid Selloff

Non-Ethereum DeFi tokens are outperforming their Ethereum peers.

Of the top 10 best-performing DeFi tokens with over $100M market capitalizations in the past seven days, six are non-Ethereum or cross-chain based and four exist solely on the Ethereum blockchain. 

On the flip side, looking at the 10  biggest DeFi losers of the last seven days with $100M market capitalizations, eight are deployed exclusively on Ethereum.

Tokens of non-Ethereum based DeFi projects are weathering the recent market slump better than Ethereum-based peers as concerns mount that the second-biggest blockchain by market cap is becoming too expensive to use. Ethereum alternatives are rallying as some traders bet other Layer 1s will be able to attract DeFi users who are being priced out. 

Best Performers 

Three of the top five DeFi gainers in a week when ETH plunged 7% were non-Ethereum exclusive tokens DODO, Pancake Swap, and Serum according to CoinGecko’s DeFi page. DODO is a DEX built both on BSC and Ethereum, Pancakeswap is a Uniswap-forked AMM on Binance Smart Chain, and Serum is DEX built on Solana, the Layer 1 blockchain. 

Alternative L1s dominating the best performing tokens are BSC, Cosmos and Solana. These blockchains promise higher throughput than Ethereum and cheaper transaction costs. In the case of BSC, the tradeoff is transacting on a more centralized blockchain which has only 21 nodes. 

Blockchain Bridges

Ren Protocol, up more than 10% on the week, also stands out in a sea of DeFi red. With its additional deployment to BSC, the project exemplifies the recent trend of deploying to multiple chains. Ren enables users to port assets like Bitcoin and ZCash into the Ethereum DeFi ecosystem. The new bridge extends protocol’s bridging capability to Binance’s Smart Chain (BSC).

Responding to increased demand for interoperability, new token-bridges continue to pop up. The new Avalanche-Ethereum bridge has over $90M worth of assets locked in the bridge contract

Projects like Moonbeam, a parachain on Polkadot offers Ethereum-compatible smart contract support, same as Avalanche. Moonbeam differs from the Avalanche-Ethereum bridge in that the former allows for the porting of Ethereum smart contracts, while the latter serves as a bridge for Ethereum assets. 

Worst Performing Tokens 

The DeFi Pulse index is down only 1% on the week, though yesterday had lost as much as 15% relative to the previous seven-day price mark.  Three of the five worst-performing DeFi tokens were Ethereum based, with KeeperDAO, Hegic and 1inch as the biggest losers built on the network (excluding Ampleforth as it’s a rebasing token). KeeperDAO is a liquidity provider to smart contracted-based solutions, Hegic is an options marketplace, and 1inch is a DEX aggregator.

To be sure, the pullback for DeFi-based Ethereum comes after a massive rally, unrivaled by any other chain. All the top 10 performing DeFi tokens in the past 12 months are Ethereum-based, with Aave leading the way, according to data compiled by Messari, while assets held on Ethereum protocols soared from about $1B to over $50B, according to DeBank.