April went relatively well for memecoins like Dogecoin (DOGE) and Shiba Inu (SHIB), but marked big losses for decentralized finance (DeFi) tokens like Aave (AAVE) and Thorchain (RUNE), research from crypto exchange Kraken noted this week.
Using Bitcoin's (BTC) 17% loss as a benchmark, the broader DeFi sector lost an average of 34%, followed closely by layer 1 tokens or basic blockchains at 33%. DeFi relies on smart contracts instead of third parties to provide users with financial services such as trading, lending, and borrowing.
DeFi tokens were the biggest losers on an annual basis with an average loss of over 71% for investors. Ether (ETH), Ethereum's native token on which most DeFi protocols are built, gained 3% in comparison.
The DeFi token RUNE saw the biggest drop in the sector, falling 51%, while the smallest loss was 22%. Among Layer 1 projects, Solana's SOL, Avalanche's AVAX and Near Protocol's NEAR slumped at least 34% last month.
DeFi projects also saw a decline in revenue generated each time a user performs financial activity on the protocol, with the protocol receiving a small portion of the volume as fees. The decline is likely due to the fact that token prices have fallen and investor interest has waned.
Financial services platform SushiSwap saw a 29% drop in revenue, while DeFi exchange Balancer's revenue dropped by as much as 66%. The corresponding tokens, SUSHI and BAL, lost 45% and 18%, respectively, last month, CoinGecko data shows.
Curve (CRV) and Uniswap (UNI) were the only DeFi projects to see revenue increases. Curve earned 51% more in April than in March, while Uniswap earned 13% more. However, the strong fundamentals failed to attract buyers as CRV and UNI lost 15% and 34%, respectively, last month.
Memecoins and exchange tokens were the relative outperformers among crypto sectors. Memecoins lost 19% on average, while exchange tokens - such as OKX's OKB and FTX's FTT - lost only 13% on average. Privacy tokens also outperformed, gaining 16%, largely due to Monero (XMR) and Zcash (ZEC).
Meanwhile, trading activity in non-fungible tokens (NFTs) increased in April compared to previous months, even though the number of users remained the same. The average daily volume increased by 40%, while the average transaction amount increased by the same percentage.
The popular Ethereum-based NFT collection CryptoPunks lost favor and slipped to third place by market capitalization, while Mutant Ape Yacht Club jumped to second place with a capitalization of $2 billion.