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DeFi is a “one time investment opportunity”: true or false?

September 11, 2020

Former Messari product manager and well-known cryptocurrency trader Qiao Wang believes the emerging DeFi sector has tremendous growth potential.

DeFi has peaked this year. The total stored value increased from less than $ 1 trillion to just under $ 8 trillion today. Since the beginning of 2020, the TVL on all DeFi platforms in US dollars has increased more than 1000% and does not seem to be falling anytime soon.

Wang compared this year’s DeFi boom to Bitcoin before 2013 and Ethereum before 2015. which, according to him, were “once in a lifetime asymmetrical bets”.

DeFi is a “one time investment opportunity”: true or false?DeFi is a “one time investment opportunity”: true or false?

It is a very different position than that of Messari’s founder. Ryan Selkis, WHO today he claimed that DeFi is a bubble that will soon burst. He attributed this to a surge in the “ponzi economy, carpet drawing and leap in performance,” adding that high gas rates reduce the chance of profit for regular DeFi users.

If you compare DeFi to the billionaire world of traditional banking and finance, you see that there is plenty of room for growth. And even compared to the overall crypto market, DeFi is still just one point. The market cap for the top 37 DeFi tokens is only $ 6.7 billion, or 2% of the total market cap of all companies. Messari cryptocurrencies.

Many DeFi proponents believe that the entire sector can continue to thrive by simply turning investors away from multi-billion dollar “ghost chains”, Layer 1 blockchain projects that were popular and not attracted during the ICO boom in 2017. for users, but they’re still exponentially more valuable than DeFi.

The Google Payments Engineer Tyler reynolds questioned Today, the economy of crypto assets with no “future” is worth a lot more than some DeFi tokens. In particular, he cited XRP, Bitcoin Cash, Bitcoin SV, EOS, Cardano and Stellar as projects with a market capitalization of several billion dollars in stark contrast to Yearn Finance YFI, which is “only” worth 670 million US dollars.

However, The DeFi bubble emptied slightly recently after a wave of fraud involving flawed and cloned crop farming drove Ethereum gas prices to unsustainable levels. Wang warned of some of DeFi’s less honest clones and doppelgangers that have surfaced in the past few weeks:

“There has been a lot of rubbish in the last 2 months, but don’t let that distract you.”

Instead suggested experimenting with some of DeFi’s best products to get a feel for how the nascent financial ecosystem enables fundamentally new and interesting user behaviors.

He admitted that too The current revenue craze could be a bubble but said it doesn’t matter in the long run::

“At the same time, you can believe that most high-yield farmers are a zero-sum bubble ready to burst * and * that DeFi is the future of finance.”

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