- The price of DeFiChain’s native token, DFI, has been underperforming against Bitcoin (BTC).
- Dr Julian Hosp, CEO of Cake, dismissed specific explanations for DFI’s underperformance.
- Dr Hosp highlighted essential metrics to consider when assessing DeFiChain’s performance.
DeFi (decentralized finance) has been one of the hottest sectors in the cryptocurrency industry over the past year, and DeFiChain (DFI) is one of the top tokens in this space. However, over the past few weeks, the price of DFI has been underperforming compared to Bitcoin (BTC), the world’s largest cryptocurrency by market capitalization.
The CEO of Cake, Dr. Julian Hosp, has dismissed specific explanations for the underwhelming performance of DeFiChain’s native token, DFI, against Bitcoin (BTC). Dr. Hosp clarified that the negative yield of the Decentralized USD (DUSD) is not responsible for driving up the prices of DFI, nor is the DUSD trading under 1 USD the cause of DFI’s price movement.
DUSD negative yield is actually increasing DFI prices. In a worst case, it is keeping it neutral.
DUSD under 1 USD is a result, not a cause. If you think this is the reason, you are focusing on the wrong thing. It’s like having a headache and you trying to cut…
— Dr. Julian Hosp (@julianhosp) April 7, 2023
Regarding Cake/DFX’s yield offering, Dr. Hosp mentioned that it is price neutral but should be a challenging opportunity. He suggested a tweak to the DeFiChain system, lowering the collateralization factor for BTC, ETH, USDT, and USDC to benefit DFI and DUSD holders. However, Dr. Hosp clarified that his previous statements were not meant to explain DFI’s recent underperformance against BTC.
Dr. Hosp also stated that attributing DeFiChain’s underperformance to the negative yield of DUSD or the DUSD being under 1 USD is incorrect. Instead, he suggested that the selling of DFI by Burn Bots is causing its price to decline.
However, Dr. Hosp stressed that investors should consider other vital metrics when assessing DeFiChain’s performance. These include the DUSD Algo ratio, which is going down due to negative interest rates, and the Total Value Locked (TVL), which is going up and valuing DFI and DUSD more.
Additionally, DFI outperforms BTC, a promising sign for the project’s growth and potential. By considering these metrics, investors can gain a more comprehensive understanding of DeFiChain’s overall performance and prospects.