DeFi tokens are on the rise as the Office of the Comptroller of the Currency (OCC) is considering the possibility to grant banking charters to the growing number of DeFi projects.
The ongoing sentiment around the cryptocurrency ecosystem appears to be stronger around decentralized finance (DeFi) tokens. Bitcoin (BTC) which began its ongoing price retracement on Monday, January 11th, has continued to smear the confidence of traders on the need to hold onto the premier digital currency in a bid to watch new price growths above the last all-time high (ATH) of $42,000.
Just as is common in the crypto sphere, the majority of altcoins are also taking the plunge with Bitcoin which has lost over 4% of its value in the past 24 hours. The DeFi tokens including Synthetix Network Token (SNX), Compound (COMP), and Maker (MKR) are however defying the general trend and are showing stability in the face of the ongoing market dip. In the market today, SNX is up 6.34% to $15.30 at the time of writing and according to CoinMarketCap. COMP is up 0.64% to $187.50 per token while MKR saw a negligible retracement of 0.13% to $1,457.22
The stability prowess being shown by these three tokens is born out of a strong protocol fundamental as well as increasing positive sentiment based on a workable project roadmap released by the Synthetix Network Token. The team behind the SNX token noted the plans to move to ‘Optimistic Ethereum,’ a layer 2 scaling solution that will help address the scaling challenges and network fees that have been plaguing the DeFi world. According to a CoinTelegraph report, the team noted that:
“The transition to Optimistic Ethereum, a layer two scaling solution, will alleviate many of the issues experienced in 2020. There are two primary advantages to this transition: lower gas costs and higher throughput. Lower gas costs are good for all users and make the system more efficient. Higher throughput will enable us in partnership with Chainlink to reduce oracle latency, allowing for leverage via Synthetic Futures as well as a number of other protocol improvements.”
DeFi Tokens and OCC Embrace Sentiment
The potential for growth for the hoard of DeFi tokens also took a remarkable boost following the careful consideration by the Office of the Comptroller of the Currency (OCC) to grant banking charters to the growing number of DeFi projects and tokens.
This claim was based on an OpEd published by the OCC boss Brian Brooks in the Financial Times. Brooks who sees the possibility of heralding a world of self-financing banks noted in the publication:
“Could the OCC even grant a national bank charter to open-source software that manages deposit-taking, lending, or payments, if it doesn’t have officers or directors? Not yet. Under current law, drawn up on the assumptions of the early 20th century, charters can only be issued to human beings. But those antiquated rules should be revisited, just as regulations that still mandate the use of fax machines should be.”
Should the regulatory body make the move to help push out the obsolete laws that will favor DeFi and crypto in general, the market will consolidate for a massive boost in the near future. The prospect of this big future is perhaps why the bulls appear to be betting big on DeFi tokens at the moment.
Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.