The Decentralized Financial (DEFI) space has recently witnessed a surge in activity, with protocols such as high lipids and ethena gaining attention and proven success.
Despite their growth, many people question whether these protocols are truly decentralized. Are these successes fluke or are they signs of a greater change in the defi space?
Hyperliquid proves that users want Defi but not fully decentralized
High lipids, a well-known defi protocol, increased significantly in 54% of total locked values (TVL) within just one month in May. Its TVL jumps from $22.1 billion to $3.35 billion, indicating a growing interest among investors. This surge suggests that even if some aspects of the protocol are not fully diversified, they are attracting important capital and trust from investors.
Hyperliquid uses a hybrid model for order matching. Initially, the orders are consistent with off-chain, but the entire procedure, including the creation of the order, is checked and designed to be resolved on-chain. This combination ensures fast execution while supporting high standards of integrity and security.
However, this approach is partially decentralized, unlike Uniswap, Lido Dao, and Aave.
MEXC COO Tracy Jin said that the model of operations is not important when talking only to Beincrypto. This is because communities are beginning to realize that projects do not need to be fully decentralized for success.
“Paradoxically, projects like Hyperquid and Ethena were especially successful, especially as they were intentionally moved from full decentralization. Instead, they focused on core values such as protocols and transparency, defi,” Jin said.
She further stated that the success of high lipids is likely to cause a change in the way developers operate. She said teams using hybrid centralized spaces often ship faster and provide a clearer value proposition to users.
Additionally, Pauline Shangett, CSO at Changenow, told Beincrypto that the hybrid model could become the basis for the crypto industry.
“It’s not like either side has any support. Hybrid solutions are the future of the industry. Most marketing materials remain as a way for companies to differentiate themselves from their competitors. Conversely, this attempts to hide the elements of centralization.
Therefore, users may prioritize solutions that work, even if they are not fully decentralized. At the end of the day, Jin added that what matters, regardless of the operating model, is to ascertain the trust of investors.
“Investor trust is the foundation of Defi. If it gets eroded, the entire ecosystem will suffer. Without trust, users will not be able to deposit liquidity, institutions will not partner or invest, or slow the innovation cycle.
A month’s journey at hype prices
The hype demonstrated impressive growth, recording a 64% increase in May and bringing that momentum into June. At the time of writing, Hype is trading at $36.33. This sustained increase indicates strong investor interest, and the token may be heading for further profits.
Currently, decentralized finance tokens are only 16.25% away from the all-time high (ATH) reached in December 2024. To meet this price target, the hype must secure a support level of $36.47. If AltCoin holds this level properly, it can reach the ATH and push it even higher, and even continue the upward trajectory.
Despite positive momentum, continued sales by investors remain concerns about price stability in the hype. As sales pressure rises, the price should fall below $36.47 and head towards $31.26. Failure to retain this support will disable bullish outlook.
This could potentially decrease further, potentially dropping to $27.31, indicating a major shift in market sentiment.
Disclaimer
In line with Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. Although Beincrypto is committed to accurate and unbiased reporting, market conditions are subject to change without notice. Always carry out your research and consult with an expert before making any financial decisions. Please note that our terms and conditions, privacy policy and disclaimer have been updated.
