DeFi Sector Surges 38% on US Policy Shift

The DeFi sector has seen a significant surge of nearly 38% since August 17 as investors reassess how US crypto policy could affect protocol revenue and token value. According to SoSoValue, this rally is bringing DeFi closer to a market where fees, buybacks, and on-chain activity play a larger role in token valuations.

The increase in the DeFi sector index, $DEFI.ssi, from 0.3616 on August 17 to around 0.498 after reaching 0.511, represents a cumulative gain of about 37.7%. This move coincided with Bitcoin and Ethereum's recovery and broader short covering.

The shift in US policy may be a contributing factor, as the SEC proposed its 'Regulation Crypto Assets' framework, which includes exemptions and a conditional safe harbor for certain crypto-asset offerings. The Senate's CLARITY Act draft also provides protections for noncontrolling developers and leaves room for rewards linked to trading, staking, governance, and liquidity provision.