Sector Rotation: Why DeFi is Outperforming L1s This Quarter
Crypto markets move in seasons. "Altcoin Season" is a myth; it's usually "Sector Season." Right now, the capital Flow is rotating.
The Death of the "ETH Killer" Trade
For years, the trade was "Buy the next L1 that is faster than Ethereum." That trade is crowded. Now, investors want Cash Flow.
The Rise of Real Yield
DeFi protocols that generate actual revenue (fees) and distribute them to stakers are decoupling from the rest of the market.
- Revenue > Speculation: Protocols earning millions in daily fees are being repriced like value stocks.
- L1 Fatigue: Investors are tired of empty blocks on high-valuation chains.
Tracking the Rotation
How do we spot this? Relative Strength.
- Create a chart of
DEFI_INDEX / ETH. - If the line is going up, DeFi is outperforming the benchmark.
Our Sentiment Analysis engine has picked up a surge in "Real Yield" keywords, signaling this shift weeks ago.
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