The altcoin market has recently experienced substantial growth following the approval of spot Ether exchange-traded funds in the United States. In May, the total altcoin market capitalization increased by about 20%, with Ether accounting for half of this growth. Excitement in the altcoin market is expected to escalate further due to upcoming airdrop events from projects like LayerZero, Etherfi, Blast, and zkSync. These airdrops will distribute project tokens worth billions of dollars to decentralized finance users by the end of Q2 2024. Liquid staking has been gaining attention in the DeFi space, benefiting projects like Pendle Finance. Pendle saw significant growth in its price and total value locked in May, surpassing Uniswap’s TVL to become the sixth-largest DeFi protocol as of June 3.
Pendle Finance allows users to separate yield-bearing token assets into principal and yield components through its interest derivatives multichain protocol. Users can split assets like Renzo’s ezETH on Pendle to generate yield tokens and principal tokens, each with a maturity date. Holders of yield tokens are eligible for airdrop allocations from the underlying asset, while principal token holders are not. Airdrop farmers have been incentivized to deposit their assets into Pendle due to point multipliers offered by liquid restaking protocols, which increase airdrop allocations. This leveraged point farming process aims to expand the utility and adoption of liquid restaking tokens within DeFi.
Pendle’s dependence on liquid restaking tokens for its locked value poses a high single-risk exposure. The platform saw a significant outflow of TVL in late April due to airdrop allocations from other projects like Etherfi and Renzo. However, these projects have announced second seasons of their airdrops to maintain TVL. Notcoin (NOT), the native token of a Telegram Mini DApp called Notcoin, has seen a substantial price increase in the current market environment. Notcoin has attracted over 35 million users and distributed 78% of its tokens to users at launch. The recent price surge of NOT may be attributed to increased community awareness of the TON ecosystem and collaborations with other applications within the ecosystem.
It is important to note that this article does not provide investment advice. Readers should conduct their own research and exercise caution when making investment decisions. Every investment and trading move carries risk, and it is essential to thoroughly evaluate options before proceeding. The altcoin market’s recent growth and developments in projects like Pendle Finance and Notcoin offer exciting opportunities for investors in the evolving DeFi space. Stay informed and stay safe in your investment journey.
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