Waves founder Sasha Ivanov warns that decentralized finance’s surge might have negative consequences.
Decentralized finance’s (DeFi) surging popularity might backfire and hurt the forward-looking sector, Waves cryptocurrency platform founder and CEO Sasha Ivanov told Cointelegraph in a recent interview.
Ivanov compared DeFi to the 2017 ICO craze in a tweet earlier today, saying, “Please let’s not make a new ICO bubble out of #DeFI.”
When asked to elaborate on his statement, the Waves CEO noted that he strongly believes in DeFi, but is worried about the hype surrounding it:
“DeFi is the future, but it’s going to be coming through a bubble part of the cycle now, which can harm its long-term development.”
In Ivanov’s opinion, DeFi networks tokens “are clearly utility tokens, and do have a mechanics that gives them valuation”. However, he noted, “the pricing can be inadequate at times, which will lead to bubble-like situations”.
Even though DeFi might seem less appealing to uneducated investors than ICOs due to its complex structure, it is likely to suffer from volatility and sudden price drops, Ivanov continued:
“DeFi products are more sophisticated in nature than simple ICO tokens, which probably will limit the influx of non-qualified investors, but future inevitable volatility and price crashes can severely harm DeFi mass adoption perspectives, which would be very bright otherwise.”
DeFi’s surge
DeFi’s popularity has been surging recently. As reported by Cointelegraph, more than 1,000 new DeFi assets were added in May, increasing by almost 10 fold over the same time last year.
Meanwhile, the total number of DeFi users over time is nearing the 600,000 mark.
Consequently, many DeFi-based tokens have been surging in 2020, with some tokens showing gains above 60% over the past week alone.
Source: , CoinTelegraph
Articles listed with Cash Tech News as the author are either general information, or may have been imported from another website, to bring our readers a rich media experience that encompasses articles that we find interesting, as well as those curated by others.
The views and opinions expressed here are for informational purposes only, and should not be confused with professional financial advice. These opinions are solely those of the author and do not necessarily reflect the views of CashTechNews.com. Every investment and trade involves risk. You should conduct your own research, and contact your professional financial advisor before making any investment.
Corrections, feedback, and ideas should be submitted through the website contact form.