Recently, the poor performance of some DeFi coins and altcoin projects points to increased risk in the crypto market. When uncertainty is high, traders tend to turn to Bitcoin, which is considered less risky. In this article, let’s take a look at the sharp sell-offs in various cryptocurrencies over the past two weeks and review the risks.
Analysts identify risks for DeFi coins
Today, Popsicle Finance (ICE) is down 22%, Wonderland (TIME) 15% and Abracadabra (SPELL) 15%. These are altcoin projects created by Daniele Sestagalli, which has gained a cult following in recent months thanks to its community-centric approach to crypto projects. On Wednesday, analyst Shaurya Malwa reported that their protocols were worth billions of dollars at their peak, but those fortunes have since disappeared. Cryptocoin.com, SundaeSwap and CardStarter scandal took place in the week’s developments involving DeFi coins.
LUNA drops as much as 10% due to another scandal
Terra (LUNA) was launched to provide liquidity to stablecoins. The reserves of Terra-based lending and borrowing protocol Anchor, which supposedly offers an indicator deposit rate of around 20% that surpasses the industry, are also being lost as a result of the crypto market crash. Terra’s UST stablecoin has been streamed as the tokens used to leverage some Sestagalli-related stablecoins are in turmoil. Some observers watching the asset-stabilization saga worry that the UST and MIM could act as a “contagion” destabilizing other pools on Curve, analyst Andrew Thurman reports.
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