Ryan Selkis: “the DeFi bubble will burst very soon”

Ryan Selkis, founder of analytics firm Messari, believes that the boom in the decentralized finance (DeFi) industry will soon end and the bubble will burst, as it did with the ICO.

More DeFi projects have emerged in recent months and the market size may soon exceed $ 10 billion. Users block their assets in such applications for a reward. And projects are far from always created to help the community – some organizers do it from an experiment, others in fraudulent schemes. For example, the YAM project raised several tens of millions of dollars, but then closed overnight due to an error in the code. And the organizers of Yfdex.Finance initially launched the project to deceive users.

“The DeFi bubble will burst faster than people expect. We are approaching the peak of this pyramid economy, token farming, and rising transaction fees on the Ethereum network. All this will reduce profits and the bubble will burst. DeFi is just one pool of capital centered around a group of insiders. They will soon run out of victims that can be ripped off, ” writes Selkis on Twitter.

At the same time, the founder of Messari is not against the very concept of decentralized finance:

“Like ICOs, rewarding tokens for providing liquidity is a fundraising innovation. And smart people will be able to apply it correctly. But for the majority, I don’t recommend this industry – it’s like playing high stakes poker. “

Binance recently launched the Launchpool platform where users can block BNB cryptocurrency, BUSD stablecoin or APRA tokens to receive rewards in other projects’ tokens. The first project at Launchpool will be Bella Protocol, which recently received $ 4 million in funding. 

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