While the DeFi industry continues to grow, the DeFi bubble threat is nearing with every passing day. In fact, well-known crypto-personalities are opening up about the fact that what lies ahead for the DeFi sector.
The DeFi tokens are continuing to create waves by showing an immense rise in their price and volume as well.
As Defiye reported, yEarn Finance is getting listed on Coinbase Pro after creating quite a buzz on Coinbase. Following the announcement, other giants outlined their plans to list DeFi tokens.
Despite all the progress, many experts believe that DeFi tokens will incur a major rejection if the rug pulls (scam projects) keep on fooling investors.
For instance, SUSHI is one project that has recently been in the news for dumping its supporters. SushiSwap is the fork from UniSwap, biggest Decentralized Finance project. The project owner first ran off with developer’s fund and then after few days came back apologizing to its supporters.
Ponzi schemes trigger the DeFi bubble
The founder of the data analytics platform Messari, Ryan Selkis has stepped up to speak on the subject. In Selkis’s opinion, the rumors regarding the DeFi bubble popping in the near term are mostly exaggerated.
However, Selkis highlights that if certain projects trick their proponents and vanish stealing their money than the DeFi bubble will rise in no time. That said, Selkis refers the DeFi bubble to the ICO surge in 2017.
A few days ago, Ryan Selkis posted tweets addressing Ponzi economics in the DeFi ecosystem. The tweet reads:
“The DeFi bubble will pop sooner than people expect. We’re nearing the apex of Ponzi economics, rug pulls, and ‘yield’ hopping and ETH fees are going to eat too heavily into non-whale profits.”
DeFi and ICO similarity
The chief executive at Messari believes that DeFi and ICOs have many aspects in common. Ryan Selkis said:
“ICOs boomed for a while because everyone (laughably) thought there would be a coordinating utility token for every industry. DeFi is just one big pool of capital sloshing around a small group of insiders and mercenaries who will soon run out of victims to fleece.”
Apart from that, he is not against the whole concept of DeFi growing rapidly and helping the community.
“Fwiw [for what it’s worth], I LOVE this experimentation. Like ICOs, yield farming / incentivized liquidity provisioning is a novel innovation in capital formation. Smart people are making a killing. But I don’t recommend DeFi to most people because I don’t recommend high-stakes Vegas poker to fish.”
The DeFi tokens are the major force of driving the crypto-market ahead. Moreover, DeFi industry has grown at pace and still growing but some big personalities are implying to the fact that DeFi tokens will follow a downtrend in the future.
A few hours ago, CZ Binance tweeted concerning the DeFi industry and wrote:
“Most of the DeFi projects will fail. Some may offer short term gains, but they come with super high risks too. Don’t invest money that you can’t lose.”
Backing his tweet, he wrote:
Most likely, CZ Binance is predicting that not just DeFi most projects as a whole will suffer a massive drop in their value. Lastly, DeFi tokens are now at an all-time high with yEarn.Finance in particular rising 720% this month.