Two types of cryptocurrency tokens are outperforming the rest of the market, according to data from Longhash. Over the last year, native exchange tokens and tokens used for cryptocurrency lending—in DeFi platforms—had the greatest returns on investment (ROI).
The data, which LongHash sourced from blockchain research platform Messari, shows that only two of the 19 different token classes analyzed produced a positive ROI in the last year when measured against the US dollar.
Lending and exchange tokens had ROIs above 70% over the last year. Image: LongHash/Messari
Lending tokens were at the top, with an average ROI of 75%. These tokens are typically used by DeFi lending platforms, that allow you to lend and borrow money with other people around the world—without going through a bank or other third party. This suggests a rise in interest towards DeFi products and services.
Examples of lending tokens include the stablecoin DAI, which is pegged to the US dollar, and Nexo (NEXO), which provides passive income to token holders.
Exchange tokens came second over the last year. These are cryptocurrencies native to crypto exchanges. They are typically used to pay trading fees or for other services on the exchanges. Some exchanges like Binance have built up entire ecosystems around their exchange coins—in this case BNB—and even pay their staff with it.
In the last 90 days, a slightly different picture emerges. Exchanges tokens have only just produced positive ROIs while currencies, such as Bitcoin, performed well. However, lending tokens remain in the lead.
Earlier this month, Decrypt found that proof-of-stake coins—in particular Tezos (XTZ) and Cosmos (ATOM)—managed to rack up impressive gains against Bitcoin towards the end of last year. Crypto exchanges adding support for staking rewards, and the news this generated, likely helped to boost their bottom line.