Is DeFi yield appetite rising again? Enso raises $5M as YFI hits new highs

The appetite for DeFi is rising again as blue chips are rally and yield-earning strategy-sharing platforms, like Enso, are on the rise.

Enso, a platform where users can share yield-earning strategies, raised $5 million on April 13 from top United States venture capital firms including Polychain Capital and Multicoin Capital.

Synthetix founder Kain Warwick, Aave founder Stani Kulechov, Dfinity chief operating officer Artia Moghbel and other prominent angel investors took part in the round.

The high-profile fundraising round comes as Yearn.finance’s YFI token achieved a new all-time high above $50,000.

Why is the demand for yield-earning protocols rising?

Protocols like Yearn.finance are seeing significant demand once again as decentralized finance blue chips start to rally off the back of Bitcoin (BTC) and Ether (ETH) hitting record highs.

The appetite for high-risk, high-return plays is clearly increasing as the cryptocurrency market as a whole enters price discovery.

YFI tops yield TVL rankings. Source: Defi Llama

The term “price discovery” refers to a technical trend when the price of an asset or the valuation of a market hits a new all-time high.

From late February to mid-March, the total value locked (TVL) of DeFi asset management protocols dropped quite significantly, from $4.3 billion to $2.7 billion.

However, since late March, the DeFi asset management sector has begun to see renewed momentum, driving demand for protocols like Yearn.finance where users can earn yield on their assets.

YFI/USDT 1-day price chart. Source: TradingView

Naturally, the resurgence of asset management and yield-earning strategies in DeFi has led to a spike in venture capital interest.

Enso, for example, recently raised $5 million from a round led by leading venture capital firms such as Polychain Capital and Multicoin Capital, which have assets under management worth severa billion dollars.

Enso allows users to access alpha yield farms, batch yield farms, batch automated market maker purchases, flash swaps, collateralization and restructuring, which allows users to maximize how they earn yield across various protocols.

Spencer Applebaum, associate at Multicoin Capital — which was praised by top fund managers like Three Arrows Capital CEO Su Zhu for being one of the top-performing funds in recent months — particularly emphasized how Enso allows users to easily tap into various DeFi yield-earning strategies.

Applebaum said:

“We’re extremely excited to back Connor, Gorazd, and the rest of the Enso team as they work to open up DeFi asset management by removing whitelists and curation, and enabling composability with all DeFi networks. Enso is fully customizable and enables anyone to become a fund manager with the click of a button.”

The rising interest in yield-generating protocols, like Yearn.finance, and yield strategy-sharing platforms, such as Enso, indicate that there is a large demand for yield in the current market landscape.

Has DeFi summer arrived?

Whether the growing demand for yield-earning platforms and protocols will mark the beginning of “DeFi summer” remains to be seen.

Atop the strong technical momentum major DeFi tokens have seen, the general sentiment around DeFi has been overwhelmingly positive as of late.

Citibank released a paper on April 16 titled “Future of Money,” which described the benefit of DeFi to other fund managers. 

The recognition of the momentum and the necessity of DeFi by traditional financial institutions could be the catalyst to enable the second wave of capital inflow into the DeFi market in the next few months.