Despite lagging in 2023, DeFi 1.0 assets are now positioned for a significant breakout. DeFi blue chips like AAVE, Maker (MKR), and Lido (LDO) are hitting all-time high revenues even as their valuations remain low.

This trend is driven by several factors, including a pro-crypto U.S. landscape, ETH institutional adoption via ETFs, a stronger focus on fundamentals, and capital shifting to quality assets in a risk-off market.

Project 1: AAVE

AAVE has quietly doubled its total value locked (TVL) to $21 billion this year. Key metrics, such as active loans, revenue, and fees, have all shown significant growth. Despite these strengths, AAVE has been stuck in a bear market range for 2.5 years and is down over 10% since the start of 2024. The resilience in its core metrics positions AAVE for a potential breakout as market conditions improve.

Project 2: MKR

Maker (MKR) is the driving force behind DAI, the third-largest stablecoin by market cap. In the first half of 2024, MKR generated 40% of all DeFi profits on Ethereum, consistently earning over $15 million in monthly revenues. Upcoming catalysts include the ‘End Game’ upgrade and a $1 billion tokenized treasury initiative, which could further bolster its market position and revenue generation.

Project 3: LDO

Lido (LDO) plays a critical role in Ethereum’s adoption, managing over $27.5 billion in staked ETH. Staking has become a key liquidity sink, with staked ETH outpacing new issuance by 20 times. LDO maintains a 60% market share in liquid staking, the largest DeFi sector. Despite a 40% drop earlier this year due to SEC allegations, LDO is poised for recovery. Historically, regulatory FUD often marks major bottoms, and positive SEC developments, along with the launch of ETH ETFs, could trigger significant upside.

In summary, AAVE, MKR, and LDO stand out as key opportunities within the DeFi sector. Their strong fundamentals and potential for growth position them as attractive investments as the market shifts towards quality assets.

Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.

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