The end is near ? – The expansion of the decentralized finance ecosystem (DeFi) seems to have no limits. Every day, new protocols, with increasingly crazy returns, are emerging. This phenomenon is starting to worry some players, for whom the bubble is about to explode.
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DeFi is the new ICO
In recent months, we have witnessed the exponential proliferation of DeFi projects. Uniswap, Curve, Compound, SushiSwap, Swerve and even Hotdogswap. The vein seems inexhaustible.
However, this phenomenon is reminiscent of the ICO madness of 2017 and its tokens by the thousands.
Although DeFi is fascinating, some players in the ecosystem are beginning to fear this phenomenon. This is the case of Ryan Selkis , CEO of analysis firm Messari Crypto , who said yesterday on Twitter: “ The DeFi bubble will burst sooner than expected“ .
According to him, we are approaching the peak regarding the DeFi ecosystem and the fall is close, even going so far as to call the ecosystem a Ponzi scheme :
“We are approaching the pinnacle of the Ponzi scheme […]. Ethereum fees will impact too heavily on the profits of small investors. “
Indeed, according to him, the DeFi ecosystem only benefits a small group of whales, which makes profit at the expense of small investors:
“DeFi is just a large reservoir of capital wandering around in a small group of insiders and mercenaries who will soon have no more victims to swindle. “
Despite everything, he recognizes innovation although he does not advise taking part in the ecosystem, because it is similar to a game of chance:
“I LOVE this experimentation. Like ICOs, Yield Farming / Incentive Cash Delivery is an innovation in capital formation. […] But I don’t recommend DeFi to most people. „