DeFi 1.0 Tokens Show Promise in Current Crypto Market, Says Analyst: COMP, AAVE and UNI in Focus

Crypto analyst Altcoin Sherpa has shared insights on DeFi 1.0 tokens in the current market. The analyst discussed projects like Compound (COMP), Aave (AAVE), and Uniswap (UNI).

Crypto analyst Altcoin Sherpa has provided his perspective on the potential of DeFi 1.0 tokens in the current market. The analyst discussed projects like Compound (COMP), Aave (AAVE), and Uniswap (UNI), highlighting several characteristics that make these tokens interesting in today’s crypto landscape.

Highlighting the strengths of DeFi 1.0 tokens, Sherpa pointed out their high float and lack of any overhanging supply, as most early investors have already exited their positions.

DeFi 1.0 has very compelling reasons for buying in this current market. I'm talking about coins like $COMP $AAVE $UNI and those types. (Long)

Fundamentals:

-High float/no overhanging supply. these are old tokens and all the investors have already jeeted. You DO have to worry…

— Altcoin Sherpa (@AltcoinSherpa) March 10, 2023

Moreover, these projects continue to play a vital role in the crypto ecosystem, with Aave boasting billions in Total Value Locked (TVL) and Uniswap processing billions in transactions.

The analyst also highlighted the enduring influence of DeFi 1.0 protocols, with many new DeFi projects on various EVM chains essentially being clones of these original platforms.

“Obviously there are sometimes new features but the core parts still stay the same,” Sherpa explained.

Potential for Fee Switches

An important narrative shift for DeFi 1.0 tokens is related to fee distribution. Sherpa suggested that if these protocols implement fee switches, token holders could receive rewards from the substantial revenue that these platforms generate. This development could significantly enhance the value proposition of these tokens.

Unlike many newer crypto applications, DeFi 1.0 projects have established user bases and active communities. Sherpa highlighted this as a critical factor.

“They're also lindy enough to where you can feel pretty safe about many of these staying around for a while.”

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Technical Analysis Perspective

From a technical standpoint, Sherpa noted that these tokens have been consolidating for about two years, which is a prolonged period of accumulation that often precedes strong price movements. However, he cautioned about potential opportunity costs, as the consolidation might continue for some time.

Sherpa shared his personal approach to trading these tokens, explaining that he plans to wait for a clear breakout with volume before entering positions.

“Probably won't buy these until I see them do a 2x in price or more and then buy when a clear trend has developed.”

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Shift in Market Sentiment

The analyst suggested a potential shift in market sentiment towards these established projects. He noted growing fatigue with newer tokens that have high fully diluted valuations but lack real communities or users. This trend could drive renewed interest in DeFi 1.0 tokens.