Do you remember our price indicator function? 3 Findings from Using Dapp Performances as Indicators on Token Trading. Most of the utility tokens are invented and created based on their respective businesses. A dapp’s usage reflects the value of its own token to some extent as we believe.
Now it may be a good time for you to apply it to your DeFi token trading. After research in many DeFi dapps, we found there are high correlations between a DeFi token price and its dapp data (users/transactions/volume) in many popular DeFi products.
Now let us show you some facts below.
We can see that there is a high correlation between the $CRV token price and Curve Finance dapp data. The token price, user amount, and transaction amount tend to move in the same direction.
(The black line indicates the $CRV token price.)
When its daily users amount reached the highest at 7.09k, the $CRV token price reached its monthly highest at $10.98.
$SUSHI token price move in the same trend as its SushiSwap volume. Starting from August 29, the price curve (black line) and volume curve (blue line) almost completely overlap.
(The black line indicates the $SUSHI token price.)
Same as Curve and Sushi, the token price of Spaghetti and its DeFi dapp volume move in the exactly same direction as well.
(The black line indicates the $PASTA token price.)
When the users/transactions/volume data declined sharply, its token price $PASTA dropped crazily as well from $2.36 to $0.02.
It also works for DeFi DAO.
(The black line indicates the $MKR token price.)
$MKR price follows the same move of MakerDAO data (users/transactions/volume). $MKR reaches its daily highest price in the past 30d when MakerDAO’s daily user amount, transaction amount, and volume amount reach the peak.
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Sometimes the token price vs users/transaction indicator may work better than the indicator of price vs volume. Take Aave Protocol as an example.
(The black line indicates the $LEND token price.)
We notice that the $LEND price has the same trend as its dapp user amount and transaction amount. It seems that, when there are more users doing transactions in Aave Protocol, it will drive up the price of its token $LEND.
Similar to $MKR, it works the same for Oikos cash and its token $OKS. Compared with the transaction volume, the token price is more affected by Dapp users and transactions.
(The black line indicates the $OKS token price.)
AirSwap also follow the same sequence.
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