DeFi surging despite possible VC sell pressure

As some of the largest DeFi assets rise, crypto funds are taking the opportunity to exit their positions

article-image

Zeedign.com/Shutterstock modified by Blockworks

share

During the month of July, some of the largest and oldest assets in the DeFi space have experienced significant growth. However, multiple crypto funds appear to be capitalizing on this surge to trim their positions rather than increasing them.

Index Coop’s DPI (DeFi Pulse Index), a market cap-weighted DeFi index fund, is up 25% on the month. The leading contributors to this growth are assets such as MakerDAO’s MKR, up 70% on a 30-day basis, and Synthetix’s SNX, up 38%. 

The rise comes after months — if not years — of languid price action with many top names, such as Compound’s COMP, falling as much as 95% peak-to-trough from 2021 highs. The DPI has also outperformed majors such as ETH and BTC, which are largely flat on the month. 

Much of the recent price action is attributable to traders speculating on tokenomic updates and new products from DeFi development teams. DeFi mainstays such as Curve and Aave have both launched stablecoins, while Synthetix has released a host of new products. Chainlink recently unveiled a new cross-chain interoperability protocol, and MakerDAO has begun pursuing a major strategy overhaul led by founder Rune Christensen. 

The number of new wallets and users is also on the rise for many DeFi assets. According to a Dune dashboard, Uniswap’s monthly active users are up significantly from June 2022 lows, and the number of holders for COMP, AAVE and SNX are at or near all-time highs, per Nansen data. 

Crypto funds cut positions

Despite the bullish market action and the new developments from many projects, trading firms and venture capital funds overwhelmingly appear to be selling into the DeFi bounce, according to on-chain data. 

One wallet, labeled Jump trading by Nansen, controls .5% of the AAVE circulating supply. It has offloaded 12% of that position — worth $500,000 — to an ancillary address in the past 30 days. This address in turn sends the tokens to market maker Wintermute in batches — a possible sign of over-the-counter deals. 

The same Jump addresses also appear to have offloaded 62,000 COMP tokens worth $4.3 million, and 200,000 UNI worth $11.8 million. 

The presence of venture capital selling has been most pronounced in MKR, however. Over the past month investing giant a16z has offloaded over 24,000 tokens, worth over $30 million, after the address in question first received tokens over 4 years ago. Much like Jump, an a16z address sends to intermediary wallets before sending to Coinbase, presumably to sell. 

In addition to a16z, Parafi Capital has also sent 13,000 tokens to Coinbase Custody throughout the month of July. However, earlier today they withdrew 1,300 tokens, implying at least a portion of deposits were not sold. It is impossible to tell if tokens deposited to centralized exchanges are sold.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Brooklyn, NY

SUN - MON, JUN. 22 - 23, 2025

Blockworks and Cracked Labs are teaming up for the third installment of the Permissionless Hackathon, happening June 22–23, 2025 in Brooklyn, NY. This is a 36-hour IRL builder sprint where developers, designers, and creatives ship real projects solving real problems across […]

recent research

REPORT_Template.png

Research

The Sonic blockchain is leveraging redesigned airdrop incentives and its FeeM program to propel DeFi activity and attract institutional capital, setting the stage for ecosystem growth. Within this environment, leading protocols Shadow Exchange and Silo are poised to asymmetrically benefit due to innovative features and favorable valuations, despite facing ecosystem dependency and competitive pressures. This positions them as compelling, potentially shorter-term, investment opportunities contingent on Sonic's sustained success.

article-image

Sponsored

The blockchain creates a fair environment where AI agents and users can access deep liquidity without MEV or other forms of value extraction

article-image

After upping its offer multiple times, Circle is finally trading on the NYSE

article-image

Circle goes public on the NYSE Thursday — here’s what to expect

article-image

Sponsored

WalletConnect is the default for secure, scalable onchain interaction — but this isn’t a peak, it’s the launchpad

article-image

Circle’s stock is expected to price at $31 and will go public on the NYSE Thursday