Decentralized Finance market (DeFi) is recovering following last year’s crash. The total volume of investments in the DeFi protocols has grown from $26.5 billion in Q3 2023 to $59.7 in Q1 2024. What’s the reason behind that?
Choosing Less Risky Assets
According to statistics, investors prefer less risky crypto assets: over 90% of the money invested right now is stored in low risk assets. For example, per the PrismaStake staking platform, in their case the percentage exceeds 95%.
“Right now, despite the reputation for tolerance to high risks, crypto investors are choosing less risky options of investing in DeFi with low profitability, but higher reliability and security of assets”, Arthur Kennedy, the visionary Founder & CTO of PrismaStake notes.
The Lesser the Risk, the Lesser the Profitability
According to open statistics data, around 75% of DeFi pool assets offer profitability below 5% APY. The demand is growing for less risky formats of investments, such as staking and secured lending. At the same time the growth of the total volume of DeFi assets shows growth of liquidity and restoration of investors’ trust of centralized instruments.
PrismaStake offers various staking pools ranging from the most secure ones to the more profitable options, for example including the 90 day ETH staking, which brings around 17% profit
Staking is Growing
As of 2024, staking is also one of the fastest growing areas of investment in cryptocurrency. The volume of the ETH cryptocurrency in staking has doubled since September 2022, when it switched to the proof-of-stake mechanism. Almost 80% of DeFi asset holders prefer to keep them in staking.
The Potential for Growth Remains
The overall decrease in DeFi pool profitability shows a growing demand for this kind of asset. According to experts, the DeFi market still has a huge potential for growth, as in the total volume of cryptocurrency capitalization it only makes up for 4%.
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