Renowned Decentralized finance’s ‘DeFi’ growing popularity might backfire & hurt the forward-looking sector – Waves Association founder Sasha Ivanov.
In line with a recent interview, Ivanov compared DeFi to the 2017 ICO craze within his tweet earlier today, adding, “Please let’s not make a new ICO bubble out of #DeFI.”
When asked to further explain on his statement, the founder added that he strongly believes in DeFi, but is worried about the hype surrounding it:
“DeFi is the future, but it’s getting to be coming through a bubble a part of the cycle now, which may harm its long-term development.”
In Ivanov’s opinion, DeFi networks tokens “are clearly utility tokens, and do have a mechanics that provides them valuation”. However, he told, “the pricing are often inadequate sometimes , that can cause bubble-like situations”.
Even though DeFi might sound less appealing to uneducated investors than ICOs due to its complex structure, so it’s likely expected to suffer from volatility along with sudden price drops. Adding further, Ivanov said:
“DeFi products are more sophisticated in nature than simple ICO tokens, that probably will limit the influx of non-qualified investors, but future inevitable volatility & price crashes can severely harm DeFi mass adoption perspectives, that might be very bright otherwise.”
DeFi’s Increasing Popularity
Meanwhile, the entire number of DeFi users over time is nearing the 600k mark.
On the other hand, many DeFi-based tokens are surging in 2020, with some tokens showing gains more than 60% within the past week alone.