DeFi tokens jump as Trump win boosts regulatory hopes
DeFi tokens saw a significant surge following Donald Trump’s election victory, fueling optimism for clearer crypto regulations.
The market witnessed tokens such as Lido’s LDO (CRYPTO:LDO) jumping 40.3% to $1.37, bringing its market cap to nearly $1.2 billion.
Solana-based (CRYPTO:SOL) Raydium (CRYPTO:RAY) and Ethereum-based (CRYPTO:ETH) Uniswap (CRYPTO:UNI) saw similar spikes, with RAY and UNI gaining over 30%, trading at $4.30 and $9.49, respectively.
Ethena’s ENA (CRYPTO:ENA) token increased 35.7% to 47 cents, while Aave (CRYPTO:AAVE) rose 28%, amid rising deposits into lending protocols, which reached a two-year high of $52.4 billion, according to Artemis.
Trump's win, coupled with a more crypto-friendly legislative body, has sparked hope for regulatory clarity in the DeFi ecosystem.
“The biggest Trump-specific change is likely to be a push for greater regulatory clarity around the broader crypto ecosystem,” Seth Ginns of CoinFund noted.
The Biden-Harris administration, under SEC Chairman Gary Gensler, had taken a stringent stance toward crypto, initiating enforcement actions against several DeFi protocols, including Uniswap Labs.
The SEC had also implied that tokens like Lido’s stETH were unregistered securities.
In contrast, Trump is expected to replace Gensler, potentially offering more supportive regulatory guidance for DeFi protocols.
Keyu Liu of Primitive Ventures mentioned that clear regulations could enable DeFi platforms like Uniswap to activate fee switches, allowing revenue to be redistributed to UNI token holders.
This potential shift is seen as a game-changer, resolving revenue distribution challenges in the DeFi sector.
Wintermute, a major crypto market maker, submitted a governance proposal aimed at activating an ENA fee switch, noting that Ethena has already generated $128.4 million in fees this year, per Token Terminal.
Viktor Bunin of Coinbase expressed optimism, anticipating changes that would “fire Gary,” enable ETH staking in ETFs, and curb SEC investigations.
Aerodrome’s Alexander Cutler pointed out that DeFi provides “institutional level products and services, without the value extraction of intermediaries,” which enhances user value.
As Joseph Schiarizzi of Nerite stated, “DeFi is so back,” with Ethereum holders seeing increased wealth and actively using DeFi protocols.
Currently, the total value locked in DeFi protocols stands at nearly $89 billion, according to DefiLlama.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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