Messari founder: DeFi bubble is about to burst, victims are not enough
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Babbitt Information (ID: bitcoin8btc)
Babbitt Information (ID: bitcoin8btc)
, Author: BENJAMIN PIRUS, Compiler: Wendy, published with permission.
Ryan Selkis, founder of crypto data site Messari, predicts the imminent demise of DeFi — similar to what happened with ICOs.
He tweeted:
"The DeFi bubble is bursting faster than people expected. We are approaching the apex of Ponzi economy, deceit, and yield jumps (short-term mining profits), and ETH fees will overwhelm non-whale earnings."
In recent weeks, a number of DeFi projects seem to have popped up out of nowhere, offering massive yields and loans to drive compounding returns in this complex ecosystem. However, some of these projects present themselves as legitimate investment platforms, only to disappear with investors’ money — known in the industry as “rug pulls.”
SushiSwap is the latest rug pull, albeit only partially. Chef Nomi, the head of the project, took part of the developer funds, leaving FTX Exchange CEO Sam Bankman-Fried (SBF) to clean up the mess.
Selkis says:
“ICOs boomed for a while because everyone (ridiculously) assumed that every industry would have a corresponding utility token. DeFi was just a big pool of capital around a small group of insiders and profiteers, victimized will soon be insufficient.”
ICO had its glory days in 2017, when the market environment was similar to DeFi today. Projects based on just a concept can successfully raise millions of dollars in minutes.
