Recent shifts in SEC policy have opened new opportunities for DeFi governance tokens, positively influencing their market activity.
Changes in Regulation for DeFi Tokens
DeFi governance tokens have been under the scrutiny of the SEC since their inception. The commission has been cautious about cryptocurrencies, often relating their status to securities. However, with the new SEC chair Paul Atkins, the situation has changed. He has proposed a more flexible regulatory framework for DeFi companies, potentially leading to greater cooperation between regulators and the industry. 'American values of economic freedom, private property rights, and innovation are embedded in the DNA of the DeFi movement,' stated Paul Atkins.
Growth Trends of UNI, AAVE, and SKY
The positive changes in SEC policy have greatly benefited major decentralized finance projects. The tokens UNI, AAVE, and SKY have seen significant growth, with UNI rising by 23%, AAVE by 11%, and SKY by 13% over the past week. These projects from the Ethereum ecosystem have been actively working to integrate with traditional financial institutions.
Impact of DeFi on Ethereum
For a long time, DeFi relied on the bullish trend of Ethereum; however, this has shifted: decentralized finance is now supporting Ethereum. In May, Uniswap generated a trading volume of $92 billion, which is one of its best performances since 2020. The increasing number of ETH deposited in Aave and SKY for borrowing stablecoins highlights the importance of these projects for market liquidity.
The SEC's shift towards a more favorable stance on DeFi tokens recently has created a positive backdrop for their growth. This change signals a potential broader acceptance of decentralized finance in the traditional economy.
