The Sector That Dominated 2020
Well, that was the year, wasn’t it? What a great year for DeFi! I know that the majority of DeFi enthusiasts joined the “DeFi Army” in 2021. However, there were some pretty amazing gains in 2020 as well, which matured into a second DeFi season in 2021. There was actually quite a significant correction in 2020. However, I was convinced that there would be a second wave. Fortunately, I was correct, as I continued gaining exposure to DeFi despite many insisting that it would be a long time before we saw any new gains.
This is why it’s important to follow your own conviction. Provided, it’s not just hopium. I have another strong conviction in regard to a coin that many would perhaps suggest is not up to the task of reaching my expectations, but that’s for another article. We have seen the development of multiple DeFi projects on Leofinance. CUB, PolyCUB, and the incorporation of Hive into the DeFi world via the DeFi protocols built on Leofinance.
Early investors in CUB saw massive gains within the first 48 hours. However, hodlers got absolutely slaughtered. Let’s be clear… this is not indicative of CUB. This is how DeFi projects behave. Honestly, I have never seen a DeFi project avoid this dynamic. Very much like a pump and dump, DeFi attracts early investors, as the yields are truly significant. These gains water down very quickly, and this is when the early birds pull out and sell everything.
The only DeFi protocol to avoid this outcome to some extent was PancakeSwap. However, the bear market was able to bring it to the same arrival point, it just took a little longer. However, when you look at where CAKE began trading compared to where it is currently priced, it is still significantly higher. Early entry is always a winning move! The same is true of Solana. Early investors who bought SOL at approximately $0.30 are still far from experiencing loss despite the collapse.
Back To Grass Roots
Due to the current bear market and “DeFi effect”, LEO has returned to the grassroots level, in terms of price. This provides the greatest opportunity for brave investors. In a similar way that the covid dump was a blessing in disguise, the current market is presenting tremendous opportunities, in regard to value. Discounts abound, and LEO is one of them. The great thing about LEO is that you can earn the token.
As DeFi projects begin to rise from the ashes, so will the projects that “house” them. This is where I believe LEO will begin appreciating again. Considering that LEO also has passive income opportunities via delegation, it becomes an even more attractive asset to acquire at rock-bottom prices. Investors have to weigh up the risks against the potential gains. As I said, the fact that you can earn LEO reduces much of the risk.
When sound projects trade at a discount, the “value dynamic” is very much at play and should not be ignored, in my opinion. LEO is trading a little above $0.04 at the time of writing. With an all-time high of approximately $1.21, the potential upside is quite promising, once prices begin correcting. Both bull and bear markets exaggerate prices towards each market bias. Investors and traders need to capitalize on this dynamic.
This means selling when prices are overvalued in a bull market and buying when prices are undervalued in a bear market. It really is that simple. Emotions however are an investor’s worst enemy and must be conquered in order to make sound decisions. For much of 2022, I have opposed dollar-cost averaging. However, the tide is about to turn and the DCA strategy is about to become a wise move, once again.
Leofinance has managed to maintain strong engagement and activity during the course of this bear market. Just take a look at some of the stats compiled by @dalz to confirm what I am saying. This is bullish behavior. Unfortunately, the price has little option but to surrender in a bear market. Community engagement is however another story and reveals the true condition of any project. Do your own research and make your own decisions. I will however continue to slowly accumulate LEO.
I choose to continuously stake my LEO, as I would never consider selling at these crazy prices. This is a season of accumulation.