It’s clear that DeFi is all the rage in 2020, with the market cap of this segment having more than doubled year-to-date to currently hover at USD 2.5 billion. (18:48) Matthieu Jobbe Duval, head of financial products at Coinlist, said it’s a “very impressive figure,” adding:

(18:52) We breached USD 1 billion back in winter 2020. And people said, ‘you know, it’s because of ETH, USD rally…Now it’s hard to put that argument forward because ETH has been just like bitcoin — very stable in the last couple of months.”

(19:10) The growth, Duval says, has been two pronged, spurred by stablecoin Maker, which has gone from a USD 100 million market cap to USD 200 million, and Compound (COMP), which has grown its asset base by a couple of orders of magnitude.

(20:35) “People who come on Compound really come for that COMP token being airdropped to them and not necessarily for the actual use case of the smart contract, which is lending and borrowing.”

(23:56) In the coming weeks and months, investors should keep their eye on COMP token. The COMP price has fallen from USD 250 to USD 165 since launch.

(24:23) I think COMP is a bit of a victim of its success. Everybody is looking to the COMP token as the barometer to DeFi health. COMP has gone down steadily every single day, it’s currently at USD 165. The intrinsic value…is around USD 20-30. So you still have a good amount of room there. So COMP is No. 1 thing you want to look at.”

(25:06) Investors should also keep their eye on liquidity pools to see if yields hold once volume starts picking up again.