Ethereum

Lido DAO

DeFi

Ethena

Decentralized finance tokens rallied over 30% as traders expect the Trump administration to strengthen the “investment appeal” of holding “utility” tokens, according to an industry analyst.
UNI was one of the biggest winners across Nov. 6 and 7 — increasing over 35% to a local high of $9.58 — while Lido DAO (<a data-ct-non-breakable="null" href="https://cointelegraph.com/lido-dao-ldo-price-index" rel="null" target="null" text="null" title="null">LDO</a>), Ethena (<a data-ct-non-breakable="null" href="https://cointelegraph.com/ethena-price-index" rel="null" target="null" text="null" title="null">ENA</a>), Aave (<a data-ct-non-breakable="null" href="https://cointelegraph.com/aave-price-index" rel="" target="_self" text="null" title="https://cointelegraph.com/aave-price-index">AAVE</a>) and Maker (<a data-ct-non-breakable="null" href="https://cointelegraph.com/maker-price-index" rel="null" target="null" text="null" title="null">MKR</a>) increased well over 20% from their local lows to highs, CoinGecko <a data-ct-non-breakable="null" href="https://www.coingecko.com/" rel="null" target="null" text="null" title="null">data</a> shows.
“Until recently, DeFi tokens have been largely labeled as ‘useless governance tokens,’ tokens which serve no value other than voting on protocol changes via governance voting rights,” explained Charlie Sherry, head of finance and cryptocurrency analyst at BTC Markets, in comments to Cointelegraph.
<blockquote>
 “However, investors and tokenholders have been buying on the bet that one day, these protocols will be able to pass value back to the token through fees earned by the protocol.”
</blockquote>
Sherry noted that such “value accrual mechanisms” haven’t been implemented because many DeFi protocols have feared enforcement action from the Securities and Exchange Commission, Sherry explained, pointing to the <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/sec-targets-uniswap-open-source-liability" rel="null" target="null" text="null" title="null">SEC’s probe into Uniswap Labs</a> as a textbook example.
Donald Trump<a data-ct-non-breakable="null" href="https://cointelegraph.com/news/trump-declares-victory-crypto-community" rel="" target="_self" text="null" title="https://cointelegraph.com/news/trump-declares-victory-crypto-community"> secured the US presidency</a> on Nov. 6, defeating Vice President Kamala Harris. This result could lead to the resignation of <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/sec-chair-bitcoin-white-paper-anniversary" rel="" target="_self" text="null" title="https://cointelegraph.com/news/sec-chair-bitcoin-white-paper-anniversary">SEC Chair Gary Gensler</a> as early as December or January, <a data-ct-non-breakable="null" href="https://mail.10xresearch.co/p/quick-update-we-expect-a-new-sec-chair-by-april-may-2025" rel="nofollow noopener" target="_blank" text="null" title="https://mail.10xresearch.co/p/quick-update-we-expect-a-new-sec-chair-by-april-may-2025">according</a> to 10x Research.
Both of these together may have sparked a wave of “regulatory optimism,” Sherry said.
<blockquote>
 “[The] markets are now pricing in the anticipated regulatory shift, expecting a friendlier environment for DeFi projects and their tokens.”
</blockquote>
<figure>
 <img alt="SEC, Fees, Donald Trump, Maker, Uniswap, Aave, Governance Token, Gary Gensler, US Elections 2024" src="https://s3.cointelegraph.com/uploads/2024-11/01930510-7bf2-71ba-be05-aaa5a8b90972" title="">
 <figcaption style="text-align: center;">
 Top performing tokens over the last 24 hours. Source: CoinGecko
 </figcaption>
</figure>
Explaining the value accrual mechanism further, Sherry said lending and borrowing protocol Aave’s “fee switch” proposal would be a “significant step toward creating intrinsic value” for AAVE tokenholders.
Similarly, Sherry noted a portion of fees from <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/uniswap-launches-layer-2-unichain" rel="null" target="null" text="null" title="null">Uniswap’s new layer 2 Unichain</a> will also flow to UNI tokenholders — “transforming UNI from a governance token into a utility asset and expanding its investment appeal.”
The DeFi protocols behind LIDO, ENA, MKR and Frax (FXS) could see similar “value-accruing” changes, too, Sherry pointed out.
Related: <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/ethereum-is-still-like-amazon-in-the-1990s-21-shares" rel="null" target="null" text="null" title="null">Ethereum is like ‘Amazon in the 1990s’ — 21Shares</a>
Meanwhile, 10x Research’s head of research, Markus Thielen, says DeFi tokens likely rose because some traders adopted the “buy the laggard” strategy — which involves purchasing&nbsp;<a data-ct-non-breakable="null" href="https://cointelegraph.com/news/ether-bitcoin-ratio-hits-lowest-3-years-bearishness-high" rel="null" target="null" text="null" title="null">underperforming assets</a>&nbsp;over the previous year that may become leaders the following year.
There is also speculation that <a data-ct-non-breakable="null" href="https://cointelegraph.com/learn/blackrock-ishares-ethereum-trust-etf-etha" rel="null" target="null" text="null" title="null">BlackRock may promote</a> its spot Ether (<a data-ct-non-breakable="null" href="https://cointelegraph.com/ethereum-price" rel="null" target="null" text="null" title="null">ETH</a>) exchange-traded fund “more aggressively” in 2025, Thielen told Cointelegraph.
Thielen said Ether could reach $3,000 should it successfully break above the $2,700 level.
Ether is currently trading at $2,845, up 8.5% over the last 24 hours.
Magazine:<a data-ct-non-breakable="null" href="https://cointelegraph.com/magazine/simple-change-save-ethereum-roadmap-to-hell/" rel="null" target="null" text="null" title="null"> Proposed change could save Ethereum from L2 ‘roadmap to hell’</a>

DeFi tokens soar 30% as traders tip ‘friendlier’ DeFi landscape under Trump

Cointelegraph

Other articles published on Nov 7, 2024

Trust Wallet CEO Backs Web3, Plus Wallet’s Top-Tier Encryption Ensures Secure Asset Access Amid C...

Ethereum Foundation Unveils Mekong Testnet Ahead of Pectra Network Upgrade

Bitcoin makes a new ATH as the crypto market adds $200 billion overnight following Trump’s victory

MemeFi November 7: Secret Tap Combo and Video Codes

College Student Turns Solana Win into Next Big Bet on BlockDAG

Cronos Labs announces an expansion of its strategic partnership with Google Cloud

Join our free newsletter for daily crypto updates!