Decentralized finance — better known as “DeFi” — is back in style once again. This segment of the cryptocurrency market has been surging higher once again, with tokens pertaining to the space gaining dozens of a percent in a day. This comes as Bitcoin and Ethereum, the crypto market leaders, have stagnated a few percent below their year-to-date highs.
One of the best-performing DeFi tokens of the past 24 hours is LEND, the native governance token of the Aave protocol. Aave is one of the largest Ethereum-based protocols, with more than $500 million worth of value locked in its contracts.
Why Aave Is Up 30% in the Past 24 Hours
LEND set a new all-time high on Wednesday, surging over 30% to a price in excess of $0.45. This means that since the start of the year, the asset has gained in excess of 2,000%.
Chart of LEND's price action on Binance since the launch of Yam (around 18:00 on the left side of the chart) from TradingView.com
The DeFi token’s price performance on Wednesday was spurred by the launch of Yam Finance. Yam is an experimental DeFi protocol whose native token is YAM.
How this pertains to LEND is that the only two ways one can obtain YAM are: 1) buy it from Uniswap or other exchanges, or 2) deposit any of eight Ethereum-based crypto assets into Yam, then receive YAM over time. The eight Ethereum-based crypto assets that Yam supports are COMP, LEND, LINK, MKR, SNX, WETH, YFI, and ETH/APML Uniswap v2 LP tokens.
Because not everyone owns the eight aforementioned cryptocurrencies, those that wanted to obtain YAM had to acquire the coins, LEND included.
Related Reading: Crypto Tidbits: Bitcoin Explodes Past $11k, Ethereum 2.0 Nears, Cardano’s Shelley Launches
Just Bull Market Things
Not only is Yam’s effect on DeFi tokens crazy but so is the price of YAM itself.
As of this article’s writing, the price of YAM trades for $120. This means that the cryptocurrency has a fully-diluted valuation in excess of $500 million just a day after its launch.
Many commentators in the cryptocurrency space have noted that such wealth generation events only occur in crypto bull markets. After all, in what other markets can hundreds of millions of dollars worth of value be spun out of code?
Featured Image from Shutterstock Price tags: lendusd, lendbtc Charts from TradingView.com Here's Why Aave's LEND Is Up 30% in the Past 24 Hours: DeFi Craze