On September 10th Selkis tweeted
“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.”
Of late, several DeFi ventures, whose background is hardly known, have sprouted and claim to offer considerable interest and loans as portion of a complex ecosystem churning out huge compounded gains.
A few of these ventures, nevertheless, manage to gain reputation as genuine investment vehicles before disappearing with hard earned money of investors, referred to as “rug pull” in the crypto sector.
To a certain extent, SushiSwap also functioned as a rug pull, though, partially. The venture’s chief, nicknamed Chef Nomi, exited with a share of developer fund, leaving the venture under Sam Bankman-Fried, the CEO of crypto exchange FTX. Bankman is now managing to revive Sushi.
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.
— Ryan Selkis (@twobitidiot) September 10, 2020
In another tweet, 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.”
ICOs had their booming period three years before, similar to the DeFi craziness seen currently. Ventures based on simple ideas succeeded in raising millions of dollars in few minutes. Selkis stated that he is open to other views, even though the prevailing situation seems to be too good to be true. The Messari founder also pointed out that he is not against the concept of DeFi as such.
“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.”
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.
— Ryan Selkis (@twobitidiot) September 10, 2020
Eventually, the advancement related to DeFi is taking the crypto sector to next stage. History shows that invariably all technologies have been misused by fraudsters at some point in time. However, it should not stop be a reason to restrain technical advancements.