Vitaly Buterin compared DeFi with the Fed’s “printer”


  • Vitalik Buterin does not believe in the success of DeFi

  • Users are ready to continue investing in DeFi tokens

  • YFI is still risky

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Ethereum co-founder Vitaly Buterin once again recalled that the DeFi market Decentralized finance (DeFi) is financial services built on blockchain technology that offer users access to an open, efficient and … More.

DeFi is no different from the Fed

Vitaly Buterin once again addressed to all DeFi market participants on his Twitter. In the post, he compared the decentralized finance sector to the US Reserve System, which prints dollars non-stop in hopes of tackling the crisis caused by the coronavirus epidemic. In particular, Buterin wrote:

“Seriously, the sheer volume of coins that need to be printed nonstop to pay liquidity providers in these modes of growing 50-100% yields makes major national central banks look like they’re all run by Ron Paul.”.

Thus, Buterin is trying to warn investors against naive optimism. Indeed, now many users are investing huge amounts of money in projects related to decentralized finance, expecting super profits. However, Buterin himself points out that such activity will ultimately form aggressive inflation, and the project founders are simply obliged to issue tokens to provide liquidity..

Twitter users are actively discussing Buterin’s tweet. Some of the participants support the point of view of the co-founder of Ethereum. For example, @Larry compared the cultivation of DeFi tokens to the Ponzi scheme. He wrote that “token farming is just a giant Ponzi scheme at the moment”.

However, most users have defended the DeFi market and believe Buterin’s statements are unfounded. So the user @Davidiach wrote the following:

“If you see these printed coins as new cryptocurrencies (like BTC, ETH, etc.), then yes, that’s crazy. But if you see them as capital in new crypto startups / cash-generating projects, it’s not that crazy. There will always be new startups with real potential in cryptography ”.

Recall that the capitalization of the decentralized finance market exceeded $ 15 billion.

DeFi tokens are growing under the pressure of investors

Vitaly Buterin compared DeFi with the Fed's “printer”

The crypto hysteria surrounding the decentralized finance market is pushing the price of the main DeFi tokens up. For example, today the price of the YFI token exceeds $ 33,000, and the token As the use of cryptocurrencies grows, new types of tokens appear. They can represent value or something intangible like voices. Two … More YFII is trading around $ 3400.

The Aave (LEND) project remains the industry leader. Now $ 1.71 billion is blocked in it. It is followed by MakerDAO with $ 1.43 billion, Balancer ($ 1.36 billion), Curve Finance ($ 1.26 billion), ($ 953.6 million) and Synthetix ($ 871 million)..

However, experts are sure that such rapid growth does not promise anything good for the investors themselves..

The head of marketing at Messari, Connor Dempsey, believes that the rise in the price of the YFI token is due to an exceptionally fair launch of the project without hidden asset allocations between developers and has no objective reason for the growth..

“Nevertheless, YFI is still a risky asset. The developer André Cronier wrote directly on Twitter “I’m testing in production”, which clearly demonstrates the lack of project auditing, ”wrote Dempsey.

Many other projects like Ham.Finance, Based.Money and Spaghetti Money are special in their own way, however, unlike yEarn Finance, they do not create any economic value other than a hybrid token for project management.

Vitalik Buterin warns about DeFI crypto – you might loose money!



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Vitaly Buterin compared DeFi to the Fed's “printer”
Vitaly Buterin compared DeFi to the Fed's “printer”

Vitalik Buterin compares DeFi tokenomics to the Fed’s money printer

Vitaly Buterin compared DeFi with the Fed's “printer”

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