Now that the restrictions on cryptocurrency have eased, Indians are doing everything they can to bet on it.
Supported by the stellar returns achieved over the past six months, Indian crypto investors are flocking to decentralized finance (challenge) currencies. Defi tokens are transparent blockchain-based financial networks on which lending, borrowing and other transactions can take place without the intervention of a third party such as a bank.
Although the concept has been around for more than five years, there is a sudden surge in interest in these coins, as they promise to replace financial institutions with smart contracts, which run automatically with all the conditions written in the code. . “Smart contracts seem uniquely positioned among new technologies to facilitate asset transformation, one of the most central roles of existing financial institutions,” said Ariel Zetlin-Jones, associate professor of economics at the Tepper School of Business of Carnegie Mellon University.
So, as Indian investors search for the next bitcoin, the challenge token is seen as a lucrative option, according to Ashish Singhal, CEO of CoinSwitch, a Bengaluru-based global aggregation exchange that recently launched a platform designed for them. Indian retail investors.
On August 19, when CoinSwitch listed six Defi Coins on its exchange, Indians plowed around $ 1 million (Rs 7.39 crore) in a single day. And over the next 30 days, $ 10 million worth of Defi coins were traded.
Likewise, challenge tokens are gaining ground on WazirX, one of the popular crypto exchanges in India. The exchange has listed 16 Defi coins, of which 12 have entered the exchange in the past four months.
“Each week, we add a Challenge token. Approximately $ 2 million to 3 million challenge tokens are traded daily, which represents 25% of total trading volume, ”said WazirX Founder and CEO Nischal Shetty.
This trend has spread to the United States, where new Defi tokens are gaining strong pulls within hours of going public. Worldwide, there are over 200 tokens available today, many of which are receiving strong traction.
According to the Defi Pulse Index, around $ 8.91 billion has been invested in the challenge token globally, up from $ 4 billion at the start of August.
As the popularity of Defi Tokens increases, they face a familiar foe in India.
The biggest thorn for cryptocurrencies in India has been the regulators.
The sword of a blanket ban continues to hang over cryptocurrencies. In fact, the Union of India cabinet will soon be discussing a bill to ban virtual currencies, according to a recent report.
There is another setback: the fear of history repeating itself.
As the global economic crisis worsens, investors are turning to cryptocurrencies, including Challenge tokens. There are echoes of the ICO (Initial Coin Offering) bubble of 2017 when several new coins struggled after the initial rush. Defi tokens have also seen high volatility as more and more coins of this type enter the market.