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DEX and Layer 2s among crypto’s worst 2022 performers, Kaiko

By Daniela Ešnerová

10:14, 8 February 2022

Chart representing market moves down
DEX basket lost a whopping 36.1% in the first five weeks of 2022, Kaiko analysis show – Photo: Shutterstock

Cryptocurrencues have had an underwhelming start to 2022, but some token types are faring better than others.

Bitcoin (BTC) still dictates moves by the rest of the market but the spread between the best and worst performing cryptocurrency is more than 20%, an analysis from research firm Kaiko shows. Decentralised exchange tokens (DEX) and layer 2 tokens are among the worst crypto performers of 2022 so far, Kaiko shows.

“Overall, crypto assets remain tightly correlated to the price of bitcoin. Yet, the magnitude of returns frequently diverges across sectors, and there have been strong differences in performance since the start of 2022.

“We built six simulated portfolios tracking composite returns of the top five tokens per sector ranked by market cap," Kaiko said, explaining their methodology.

Performance of six crypto composites of 2022. Performance of six crypto subsectors in 2022. – Photo: Kaiko

The DEX basket lost 36.1% in the first five weeks of 2022, Kaiko figures show. Among the most famous DEX tokens are UniSwap (UNI), the 24th biggest digital token by market, and PancakeSwap (CAKE), 54st biggest token by market capitalisation. Uni is down 30.75% year-to-date, and CAKE is -27.89%.

XRP/USD

0.60 Price
-0.780% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.01168

BTC/USD

66,815.00 Price
-0.890% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 106.00

DOGE/USD

0.13 Price
-2.370% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.0012872

SOL/USD

172.98 Price
-1.250% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 2.2652

Layer 2 scaling solutions are protocols built on an existing blockchain that aim to address transaction speed and scaling of the main blockchains. The most famous layer 2 tokens are polygon (MATIC), the 15th biggest coin by market capitalisation, and loopring (LRC), the 71st biggest coin. MATIC is down down 22.57% YTD and LRC is down a 48.95% in the same period. Kaiko's basket of the top five layer 2s have lost 32.6% in 2022.

On the other side of the coin, the centralised exchange (CEX) token portfolio “registered the smallest decline of around 13%, closely tracking bitcoin’s spot performance," Kaiko concluded, adding that FTX’s FTT token contributed most to these gains, up nearly 17% after the exchange raised $400m in a Series C funding round and acquired Japanese rival Liquid.

Metaverse tokens are down 22.1% and outperformed composites of both layer 1 and layer 2 blockchains: “Most Layer 1 tokens took a hit following last week's hack of Wormhole, which suggests an interoperable, multi-chain future is far from being reality," Kaiko notes.

Markets in this article

BTC/USD
Bitcoin / USD
66815.00 USD
-598.6 -0.890%
LRC/USD
LRC/USD
0.17236 USD
-0.00273 -1.610%
LRC/USD
LRC/USD
0.17236 USD
-0.00273 -1.610%
MATIC/USD
MATIC/USD
0.55640 USD
-0.00607 -1.120%
MATIC/USD
MATIC/USD
0.55640 USD
-0.00607 -1.120%

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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