DeFi and Layer 2 coins rally following Ethereum's rise

Source Fxstreet
May 21, 2024 20:54
  • UNI, MKR, LDO, ENA lead top DeFi tokens with double-digit gains amid rising TVL.
  • ARB, OP, STRK also post strong gains in L2 sector.
  • DeFi and L2 tokens could see more growth if Ethereum continues march higher.

Ethereum ecosystem tokens — especially DeFi and Layer 2 coins — have surged following ETH's recent rally after optimism that the Securities & Exchange Commission (SEC) would approve spot ETH ETFs.

Read more: Ethereum could see new all-time high following Fidelity and Grayscale updates on ETF application

DeFi and Layer 2 could be set for explosion

Several Ethereum-based DeFi tokens have followed Ethereum in its recent rally, posting double-digit gains in the past 24 hours. Considering DeFi led the bull cycle of late 2020 into 2021, many had expected it to also take the lead in this current cycle.

However, they largely underperformed compared to Bitcoin and Solana-based coins, which were at the forefront of the crypto market's peak in March.

Also read: Week Ahead: Ethereum and DeFi to come under spotlight this week

But Ethereum's recent rise is beginning to push the DeFi narrative as ETH-based tokens across lending/borrowing, decentralized exchanges, and staking/restaking have seen impressive growth since Tuesday.

Lido Dao (LDO) posted nearly a 23% gain, Maker (MKR) jumped 13%, AAVE rose more than 16%, and Ethena (ENA) also increased by 23%. Synthetix (SNX) and Uniswap (UNI) gained 14% and 20%, respectively.

This follows a recent X post from Unisawp founder Hayden Adams, who commented on the upcoming FIT21 bill. He stated that Congress's acknowledgment of DeFi as fundamentally different is a "huge deal and a clear step in the right direction for the country."

Read more: Ethereum sees a 16% spike as Bloomberg analysts surprisingly increase approval odds to 75%

Ethereum Layer 2 tokens also joined DeFi coins in seeing huge price increases. Arbitrum (ARB) rose by 20%, Optimism (OP) posted a 14% gain, and Starknet (STRK) increased by 11%.

If Ethereum continues its march higher, the ripple effect could boost several DeFi and L2 tokens to reach new highs.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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