The DeFi sector is still feeling the chill from October's crypto market crash. FalconX's recent report paints a sobering picture: as of late November 2025, a mere two out of 23 leading DeFi tokens are showing positive year-to-date returns. The group is down an average of 37% quarter-to-date. That's a bloodbath by any standard, but averages can be deceiving. It's crucial to dissect what's happening beneath the surface to find any potential areas of stability, or even—dare I say—growth.
What immediately jumps out is the divergence in performance. While the overall sector is hurting, some tokens are outperforming their peers, and even posting relatively decent returns. HYPE and CAKE, for example, are cited as "safer names with buybacks," managing to mitigate some of the losses. Morpho and SYRUP are also mentioned as outperformers due to "idiosyncratic catalysts." Translation: they had specific, unique reasons for doing better than the rest. It suggests that investors are fleeing to perceived quality and tangible value, even in the midst of a downturn. This isn't a surprise, but it's important to see it confirmed in the data.
The FalconX report highlights a shifting valuation landscape. Spot and perpetual decentralized exchanges (DEXs) have seen price-to-sales multiples compress as prices fell faster than protocol activity. However, some DEXes, including CRV, RUNE, and CAKE, actually posted greater 30-day fees as of November 20 compared to September 30. The lending sector, on the other hand, has broadly steepened on a multiples basis, as price declines haven't been as severe as the drop in fees.
This is where things get interesting. The report suggests that investors are crowding into lending names, viewing lending and yield-related activity as "stickier" than trading activity in a downturn. In other words, people are pulling their money out of volatile trading and parking it in places where they can earn a (relatively) stable return. I've seen this play out in traditional markets time and again: flight to safety, even if it means sacrificing potential upside.
But is this "stickiness" real, or just a temporary illusion? The report itself acknowledges that lending activity might pick up as investors exit to stablecoins and seek yield opportunities. That's a plausible scenario, but it also raises a critical question: are these yield opportunities sustainable? Are they based on genuine economic activity, or are they simply Ponzi-like schemes that will eventually collapse? The KMNO example, where market cap fell 13% while fees declined 34%, suggests that some of these lending platforms are facing significant headwinds. It's like a company reporting declining revenue but trying to maintain its stock price through aggressive cost-cutting. Eventually, something has to give.
While established DeFi protocols are struggling, there's always a new crop of projects vying for attention and capital. A recent 10 New Crypto Coins to Invest in 2025: Top New Cryptocurrencies article highlights several new crypto coins to invest in December 2025, including Bitcoin Hyper (HYPER), Maxi Doge (MAXI), and PEPENODE (PEPENODE). These projects promise everything from Bitcoin Layer 2 scaling to meme-driven gains and gamified mining.
The article's author, Otar, provides some skeptical "Our View" assessments of each project. For example, regarding Bitcoin Hyper, Otar notes the lack of a testnet, public code, and anonymous developers, calling it "speculation on promises until they ship actual working infrastructure." For Maxi Doge, Otar questions the sustainability of the meme coin's niche appeal. And for PEPENODE, Otar expresses concern that the mine-to-earn game is "just a promise after TGE."
And this is the part of the analysis that I find genuinely puzzling. Why are investors even considering these high-risk, unproven projects when established DeFi protocols are trading at depressed valuations? Is it simply a case of chasing the next shiny object, or is there a deeper psychological factor at play?
One possible explanation is that investors are simply bored with the old guard. They've seen the established DeFi protocols fail to deliver the promised returns, and they're willing to take a flyer on something new, even if it's a long shot. Another possibility is that investors are drawn to the narrative. The promise of revolutionizing Bitcoin or creating the next viral meme coin is more appealing than the reality of declining fees and unsustainable yields.
It's like the old saying: "Hope springs eternal." Investors are always looking for the next big thing, even when the data suggests that the odds are stacked against them. Whether it's a Bitcoin Layer 2 promising Solana-grade speeds or a meme coin targeting gym bros who trade with 1000x leverage, the allure of quick riches is hard to resist.
I've looked at hundreds of these reports, and this particular trend is frustrating. The market, still, hasn't learned its lesson.
The data paints a clear picture: the DeFi sector is still struggling to recover from October's crash. While some tokens are outperforming others, the overall trend is negative. Investors are flocking to perceived safety, but even those "safe havens" may not be as secure as they appear. And the siren song of "new" projects, with their unproven promises and questionable fundamentals, continues to lure investors into high-risk territory. It’s a classic case of recency bias combined with a dash of good old-fashioned greed.
The question, then, isn't whether there's a safe haven for investors in DeFi. The question is whether investors are willing to accept the reality of the situation and adju
