Despite the ongoing drama surrounding the recent filings made by the U.S. Securities and Exchange Commission (SEC) alleging certain tokens as securities, the value locked on decentralized finance (DeFi) applications operating on their blockchains has remained mostly stable. Prices of BNB coin (BNB), Solana’s SOL, Cardano’s ADA, Polygon’s MATIC, and other tokens have tumbled, yet the lack of sudden capital flight suggests positive sentiment among global market participants.
It’s been a long crypto winter and the majority of ‘tourists’ have already left the space, shared Kyle Doane, trader at crypto investment firm Arca. The remaining participants are most likely more dedicated believers and thus less affected by the latest actions from the SEC. Martin Lee, an analyst at crypto analytics firm Nansen, shared the sentiment, saying, “We’re not seeing any massive changes in number of users or transactions on Polygon, Solana and BNB Chain and they’ve largely remained within similar levels as they’ve been in the past month.”
Data shows that the value locked on Cardano, Solana and BNB Chain networks fell just over 5% in the past week, in line with a broader market decline. These declines hovered at just over 1% on a monthly basis, the data show. Julio Moreno, head of research at analytics firm CryptoQuant, pointed to the $2.5 million in withdrawals on Tuesday from the Polygon network following the alleged classification of MATIC tokens as securities in the U.S., yet noted that “from a historical perspective, these withdrawal volumes remain low.”
Overall, the lack of capital flight from DeFi applications suggests that the tokens being deemed securities have not had a significant impact on the viability of the underlying tech of DeFi. As Doane said, “These forces will likely only drive more financial activity to DeFi.”