Leaders of Opinions of the Crypto Industry Warn About the DeFi Bubble
Kataryna Kovtun July 15, 2020
DeFi Bubble has been actively discussed by the crypto community.
More than $2 billion has already been blocked in this industry. Nevertheless, the most influential people in the crypto industry are hinting at the formation of a bubble.
The fully decentralized cryptocurrency industry called Decentralized Finance (DeFi) has already gained immense popularity. For an extremely long period, DeFi platforms have tried to break the $1.2 billion total blocked value. Although this proved difficult to achieve, the DeFi Compound Finance lending platform turned the tide.
Effect of the COMP Token
After Compound Finance released its own “management token” COMP, attention to the lending platform increased. The COMP token showed an impressive price movement, and the protocol outperformed the leader of Maker in the DeFi sphere. At the time of writing, about $ 700 million was blocked in Compound.
The growing popularity of DeFi has raised the total value of assets blocked in the industry to a record high of $2.45 billion. Given that Compound has assets worth $689 million, and Maker — $627 million, it seems that the DeFi space is aimed at reaching space heights.
Profitable Farming in DeFi Bubble
Also, the ongoing DeFi boom recalled the concept of “profitable farming”. I saw an annual return of more than 100%, previously investors observing the industry also entered the game to increase their profits.
However, while DeFi continues to amaze the crypto community, several prominent industry figures point to the formation of a bubble.
Cryptanalysts Opinion on DeFi Bubble
Cryptanalyst Mati Greenspan wrote about this in his tweet:
Speaking about the further development of events, Greenspan suggested that the bubble may either burst, or there will be consolidation for some time. In this case, the scale of the bubble will be much larger than the current one.
The creator of Ethereum Vitalik Buterin also pointed out the short-term profitable farming:
The blockchain company’s CEO Blockstream has similar views on DeFi:
Along with assumptions about the explosion of the DeFi Bubble, the hype around the COMP token is decreasing. Even during the altcoin rally, when the entire cryptocurrency market turned green, the COMP token did not show a significant increase in its price.
After the first days of trading at a maximum of $372.79, the coin is currently trading at a minimum of $164.76, having experienced a 15.7% decline last week.
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