Many members of the crypto community see investment risks in DeFi
Decentralized finance market compared to bubble
DeFi investor profitability raised doubts
International consortium of news organizations developing transparency standards.
Wednesday began for the digital asset market with news of the successful launch of the next DeFi protocol KIMCHI – the SUSHI fork that has recently been in the spotlight of crypto farmers. In just a few hours, the project raised about $ 500 million
It is noteworthy that the DeFi protocols manage to block large sums of money for their own needs over and over again, despite the active criticism of such initiatives from popular members of the crypto community..
KIMCHI’s triumph has sparked another wave of hard-hitting opinions on DeFiDecentralized finance (DeFi) is a blockchain-based financial service that offers users access to an open, efficient and … More. The CEO of the popular digital asset exchange Binance, Changpeng Zhao, believes that many projects in the decentralized finance market are “bubbles” (projects with artificially inflated value).
The developer gave a forecast for the future of DeFi projects. He believes that soon the level of profitability from participation in them will significantly decrease. Recall that the opportunity to make money as soon as possible through investments in DeFi projects has become one of the components of their popularity..
“High risk. Be careful, “- this is how Changpeng Zhao commented on the projects with high rates of return that are currently in demand on the decentralized finance market..
(Un) popular opinion: I see lots of bubbles in #DeFi now.
I believe the core concept of "staking coins to provide liquidity and earning a return" will stay. But these super high yield returns subsidized by new tokens won’t.
Super high risk. Be cautious!
– CZ Binance (@cz_binance) September 1, 2020
Sasha Ivanov, CEO of the popular crypto project with Russian roots, Waves, agreed that the DeFi market is flooded with “bubbles”. Foreign readers did not understand that the image shows an air-bubble protective film, which many affectionately call “pimple” and so love to “pop”.
8 Reasons Why You Should Eat More Sauerkraut
The bourgeoisie is not in the subject))
– Alex Core (@Alex_Core_) September 1, 2020
Jameson Lopp, CTO of startup Casa, also drew attention to the DeFi space. The developer was interested in the high profitability of the protocols. He noted that there is practically no information on the network about investors who, as a result, lost money due to investing in DeFi protocols..
“Someone has to be the loser while crypto farmers are harvesting their crops? Where are the losers hiding? “, – he wrote in his microblog.
Somebody has to be on the losing end of yield farming, right? Where are the suckers? pic.twitter.com/5QKg5BSCWx
– Jameson Lopp (@lopp) September 1, 2020
Jameson Lopp also ridiculed the confidence of crypto farmers in the unconditional return on investment in DeFi projects..
“Tell the risk advisors to get behind” – caption to gif.
– Jameson Lopp (@lopp) September 1, 2020
Members of the crypto community, in turn, drew attention to the number of searches for DeFi. It turned out that it is far from the ICO (initial coin offering) indicators. Based on this, it can be assumed that the market for decentralized assets has not yet reached a scale that would make it possible to compare it with the bubble of 2017.
Google Trends: #DeFi still nowhere close to #ICO levels pic.twitter.com/tokQJYcz1r
– Spencer Noon (@spencernoon) September 1, 2020
It is noteworthy that the popularity of DeFi projects and the excitement around the decentralized finance market became the reason for the beginning of regulation of the largest decentralized exchange Uniswap. The Block analyst Larry Cermak wrote about the positive impact of the formation of rules in his microblog..
Makes me happy that some regulators right now are thinking about what they could do with Uniswap as it’s gaining so much traction and they are coming up empty.
– Larry Cermak (@lawmaster) September 2, 2020
While crypto community members are discussing DeFi, a new trend is gaining popularity in the decentralized asset market – vampire mining.
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