Ryan Selkis, founder of cryptocurrency data website Messari, predicted the next demise of the decentralized finance space (DeFi). Similar to what used to be the case with coin offers or ICOs.
“The DeFi bubble will burst earlier than expected,” tweeted Selkis on September 10th. “We are nearing the peak of the Ponzi economy, the carpet trains, the ‘jump in revenue’ and the ETH commissions will devour most of the non-whale profits.”
In recent weeks Many DeFi projects seemingly came out of nowhere, offering significant interest and credit as part of an intricate ecosystem that drives total returns. However, Some of these projects are applying as legitimate to get investment before they go away with their money. This is known in the industry as “carpet pull”.
SushiSwap was one of the last examples of a carpet pull, if only partially. The project manager, known anonymously as “Chef Nomi” escaped with part of the development fund, leave to Sam Bankman-Fried, CEO of Crypto Exchange FTX, responsible for what was left of sushi.
“ICOs have skyrocketed for a while because everyone thought (weirdly) there was a utility token deal for every industry.” Said Selkis in his next Tweet. “DeFi is just a large group of capital that revolves around a small group of insiders and mercenaries who will soon have no more victims.”
ICOs had their time in the sun in 2017, Sometimes it had a mood similar to DeFi’s current one. The projects are You just build on an idea and raise millions of dollars in minutes.
Selkis said it is not closed to other opinions, although the current picture seems too lucrative to be true. Messari founder also said that is not against the whole movement in general.
“For what they’re worth, I LOVE this experiment. Like ICOs, income farming / providing liquidity incentives is a great innovation in capital formation. Smart people make a lot of money. But I don’t recommend DeFi to most of people because I don’t recommend high stakes Vegas poker for fishing. “
Finally, Advances in the DeFi ecosystem are driving the crypto industry. Potholes in the road might not be pleasant, but they probably aren’t abnormal either.