DeFi Heavyweights Curve and Aave Surge As Crypto Rally Stalls

Major cryptocurrencies nudged higher to begin the week as the rally that kicked off 2023 begins to show signs of slowing down.

A pair of DeFi stalwarts continue to surge, with Aave and Curve — both of which plan on launching native, dollar-pegged stablecoins this year — outperforming broader markets.

Bitcoin and Ether are up about 0.5% and 1% over the past day, respectively, according to data from The Defiant Terminal. Among digital assets with a top 10 market capitalization, Binance’s BNB leads with a 1.5% jump over the past 24 hours.

Aave and Curve, meanwhile, are up about 9% and 8%, respectively.

Investors appear to be eagerly awaiting the release of the GHO and crvUSD stablecoins. Technical papers detailing the tokens’ peg mechanisms sent the prices of AAVE and CRV soaring last fall.

Marc Zeller, integrations lead at Aave, hinted Monday that GHO could be around the corner.

He also proposed that Aave add Rocket Pool’s rETH, a liquid staking derivative, as collateral against which users can borrow other assets in an upcoming version of Aave, dubbed V3.

Among other things, data showing cooling U.S. inflation has sent stock markets and token values soaring since the start of the new year, with BTC and ETH both up about 25%.

Liquid Staking

Liquid staking protocols have led the charge among DeFi tokens. Such protocols make it possible to stake ETH to contribute to the security of Ethereum, earn a modest annualized reward and participate in the broader DeFi ecosystem.

Lido Rides Liquid Staking Wave To Become Largest DeFi Protocol

LDO, RPL, FXS and SWISE Outperform Broader Markets

The Defiant

Lido, Rocket Pool and their competitors stand to benefit from Ethereum’s upcoming upgrade, dubbed Shanghai, which is expected to enable the withdrawal of staked Ether in March.

Since Jan. 1, Lido’s LDO token has more than doubled in value. Rocket Pool is up more than 60% and has hit an all-time high relative to the price of ETH. Stablecoin issuer Frax, which launched its own liquid staking business last year, broke out of a six-month range Monday after rallying more than 40% in the preceding 24 hours.

But Lido’s rally has hit a roadblock.

Since Sunday, it has fallen almost 17% as institutional investors, including Jump Crypto, dump millions of dollars worth of LDO. Jump has sold more than $15M of LDO since Jan. 10, according to data from Nansen, amounting to two-thirds of its holdings

Jump Crypto’s LDO Balances. Source: Nansen