Worst-Performing DeFi Tokens: Volatility or Signs of Failure?

The crypto community is used to volatility, but at the same time the broader market is being inundated with “deadcoins” – tokens that are failing and no longer exist. We not only have to look out for the winners, but also for the losers. Additionally, participants need to be able to differentiate between warning signals and disruptive volatility signals, especially tokens in a new space like DeFi.

Synthetix Network Token (SNX)

Synthetix is ​​a derivatives trading platform that provides on-chain access to crypto and non-crypto assets. The protocol uses the Ethereum blockchain to give users access to synthetic assets (synthesizers). A synthetic asset is essentially a derivative that is tokenized to mimic the value and return of the underlying assets without the need for outright ownership.

SNX is currently trading at $4.85, down 83.25% from its all-time high of $28.77 set on February 14, 2021. In the last 24 hours, it is up nearly 10% on the weekly chart but down 17.6%.

SNX/USDT | The source: trading view

The SNX price predictions mainly see a decline up to $2.30 by the end of 2022.

However, synthetic assets are a fairly promising asset class over the long term. The tokenization of physical assets seems to be one of their most interesting features.

Imagine buying a token that tracks the S&P 500 price and then using that token as collateral in other DeFi Token projects.

In addition, it can be extended to standard stocks, commodities or debt instruments.

One day in the not too distant future we will be able to trade exotic instruments through synthetic assets like pop culture market, meme market, private token market… If any asset that will be converted to synthetic version and added to the blockchain may, the market size will increase significantly.

Wonderland (TIME)

Several tokens related to money market developer Wonderland (including TIME) crashed in late January after Wonderland co-founder Michael Patryn was revealed. Michael is also one of the co-founders of the failed exchange QuadrigaCX.

He and Gerard Cotten launched the exchange in 2013 and peaked in 2018 with over $2 billion in trading volume. However, Cotten passed away while on tour in India in late 2018, carrying nearly $190 million worth of wallet keys in crypto.

Soon after, conspiracy theories spread about the circumstances of Cotten’s death. Additionally, multiple investigations at the time revealed that Patryn was in fact Omar Dhanani, a convicted felon involved in credit card fraud and identity theft.

TIME then sold out as most of the crypto community went berserk as a convicted fraudster continued to hold the keys to hundreds of millions of dollars worth of coffers.

This altcoin is currently trading at $325.5, down 96.8% from the ATH of $10,063 hit in November 2021. After considering all the factors behind this project, it is safer not to invest in it.

TIME/USD | The source: trading view

InSure DeFi (SECURE)

Insure DeFi is used to hedge a crypto portfolio by buying SURE tokens with fiat and other cryptocurrencies.

The premium is calculated based on a dynamic pricing model that Chainlink uses to spread the risk of owning cryptocurrencies across a liquidity pool. The amount of capital required to cover the risk is determined at all times at SURE’s market price.

SECURE/USD | The source: trading view

SURE is down 19.8% on the weekly chart and over 30% monthly. However, since it’s still up 63.8% over the past year, it looks like we’re just seeing pure volatility.

On the other hand, using hedging solutions for the crypto space to stabilize and protect a portfolio in the face of growing fears of loss would be a good investment in the long run.

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