TRON’s Justin Sun says Ethereum Layer 2 Arbitrum, Optimism have performed well in shrinking DeFi ecosystem
- JPMorgan’s analysts reported that the overall DeFi ecosystem is in a shrinking mode since the spread of the CRV contagion.
- TRON’s Justin Sun argued that TRON ecosystem and Ethereum Layer 2 networks Arbitrum and Optimism have seen a rise in total value locked.
- Curve Finance founder, Michael Egorov, sold 106 million CRV in OTC deals in exchange for $42.4 million so far, fighting the CRV liquidity crisis.
The contagion from the Curve Finance exploit is spreading throughout the DeFi ecosystem. JP Morgan’s team of analysts led by Nikolaos Panigirtzoglou penned a report on the state of DeFi and said that the ecosystem is in a shrinking or stalling mode.
In response to the report, TRON’s founder Justin Sun argued that Ethereum Layer 2 projects Arbitrum (ARB), Optimism (OP) and the asset Tron (TRX) have beat the DeFi contagion, driving more assets and value to their ecosystem.
Also read: Bitcoin options worth $530 million set to expire on Friday without bear market end in sight
TRON’s Justin Sun is bullish on TRON and Ethereum Layer 2 tokens ARB, OP
The DeFi ecosystem’s spreading contagion has market participants worried about the liquidity crisis and CRV token’s declining price. Amidst Curve Finance’s exploit and founder Michael Egorov’s attempts to shore up liquidity for the CRV token, JP Morgan’s team of analysts published a report on the state of DeFi.
In the report, the team of analysts led by Nikolaos Panigirtzoglou wrote:
While the decline in the CRV token price caused some contagion to DeFi platforms using CRV as collateral, the fallout has been contained so far. However, the overall DeFi ecosystem remains in shrinking or stalling mode.
TRON founder and crypto influencer, Justin Sun, commented on the report and highlighted that Tron has gained value over the past two weeks. Ethereum Layer 2 projects Arbitrum and Optimism have witnessed an increase in the Total Value of Assets Locked (TVL) on their platform against the odds created by DeFi’s fast-spreading crisis.
An on-chain analyst at crypto data intelligence firm Nansen, behind the Twitter handle @sandraaleow, revealed that as of Friday, Michael Egorov had raised $42.4 million in Over The Counter (OTC)/handshake deals, selling 106 million CRV tokens to DeFi influencers and market makers.
The analyst shared a detailed list of projects and their CRV purchase details in a recent tweet:
Addresses that purchased CRV tokens in OTC deals
Egorov’s attempts to increase liquidity for the CRV token are met with enthusiasm in the DeFi community as several market makers and projects purchased CRV, supporting the asset that is ballast to several liquidity pools across the ecosystem.
Bitcoin, altcoins, stablecoins FAQs
What is Bitcoin?
Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by any one person, group, or entity, which eliminates the need for third-party participation during financial transactions.
What are altcoins?
Altcoins are any cryptocurrency apart from Bitcoin, but some also regard Ethereum as a non-altcoin because it is from these two cryptocurrencies that forking happens. If this is true, then Litecoin is the first altcoin, forked from the Bitcoin protocol and, therefore, an “improved” version of it.
What are stablecoins?
Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset it represents. To achieve this, the value of any one stablecoin is pegged to a commodity or financial instrument, such as the US Dollar (USD), with its supply regulated by an algorithm or demand. The main goal of stablecoins is to provide an on/off-ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value since cryptocurrencies, in general, are subject to volatility.
What is Bitcoin Dominance?
Bitcoin dominance is the ratio of Bitcoin's market capitalization to the total market capitalization of all cryptocurrencies combined. It provides a clear picture of Bitcoin’s interest among investors. A high BTC dominance typically happens before and during a bull run, in which investors resort to investing in relatively stable and high market capitalization cryptocurrency like Bitcoin. A drop in BTC dominance usually means that investors are moving their capital and/or profits to altcoins in a quest for higher returns, which usually triggers an explosion of altcoin rallies.
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Author
Ekta Mourya
FXStreet
Ekta Mourya has extensive experience in fundamental and on-chain analysis, particularly focused on impact of macroeconomics and central bank policies on cryptocurrencies.
