{"id":172320,"date":"2020-09-21T00:00:32","date_gmt":"2020-09-20T23:00:32","guid":{"rendered":"https:\/\/cryptoslate.com\/?p=172320"},"modified":"2020-09-20T21:16:52","modified_gmt":"2020-09-20T20:16:52","slug":"even-after-parabolic-rally-top-crypto-vc-thinks-ethereum-defi-isnt-overvalued","status":"publish","type":"post","link":"https:\/\/cryptoslate.com\/even-after-parabolic-rally-top-crypto-vc-thinks-ethereum-defi-isnt-overvalued\/","title":{"rendered":"Even after parabolic rally, top crypto VC thinks Ethereum DeFi isn’t overvalued"},"content":{"rendered":"

It's clear excess and euphoria is starting to seep into Ethereum's DeFi space. Uniswap nearly reached a $1 billion circulating market capitalization just two days after its launch<\/a>, a food coin called Pickle surged 1,000 percent in a day<\/a>, and Yearn.finance<\/a> (YFI) has gained over 1,000,000 percent<\/a> since its July launch, to name just a few trends.<\/p>\n

To put this into more broad and absolute terms, there is now $10 billion locked in mainstream DeFi contracts according to DeFi Pulse.<\/a> At the start of the year, this single metric was extremely close to $500 million.<\/p>\n

Even after all this, there may be reasons to believe that decentralized finance is not yet overvalued on a longer-term time frame.<\/p>\n

Is Ethereum's DeFi space really overvalued yet? A top investor is not too sure it is<\/h2>\n

After DeFi coins doubled and tripled within the span of a few weeks in June, Mechanism Capital founder Andrew Kang came out with a Twitter thread outlining his thoughts on DeFi's trend of growth.<\/p>\n

As this outlet covered at the time,<\/a> he was not then convinced that this crypto market segment had reached a top, going as far as to say that it was in the early stages of a parabolic growth cycle.<\/p>\n

Kang was proven correct in the two months that followed, as coins in the space continued to double and triple and rally higher on even bigger multiples.<\/p>\n

He is now back again, having been proved correct, and he's saying that there is still space for DeFi to grow.<\/p>\n

On Sep. 19, he wrote:<\/p>\n

“TVL in DeFi is up ~20x since 2019 and DeFi market cap is up a similar amount. I don't think price has seriously outpaced fundamentals yet. Seems low EV to cashout for a short trade and potentially miss out on parabolic growth.”<\/p><\/blockquote>\n

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TVL in DeFi is up ~20x since 2019 and DeFi market cap is up a similar amount<\/p>\n

I don't think price has seriously outpaced fundamentals yet<\/p>\n

Seems low EV to cashout for a short trade and potentially miss out on parabolic growth pic.twitter.com\/xWo2oCXZg3<\/a><\/p>\n

— Andrew Kang (@Rewkang) September 19, 2020<\/a><\/p><\/blockquote>\n