Vitalik Buterin, the chad himself, has once again warned against the overly euphoric DeFi space. Buterin goes on to compare the economics of yield farming to that of the Federal Reserve’s printer. We have been striving to get away from poor monetary policy and inflation, yet here we are. The idea of inflation seems to be accepted if you and I, the people, are the ones reaping the rewards.
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Seriously, the sheer volume of coins that needs to be printed nonstop to pay liquidity providers in these 50-100%/year yield farming regimes makes major national central banks look like they’re all run by Ron Paul.– Vitalik Buterin
Speaking of rewards, Sushiswap has taken the crypto crowd by storm. On August 28th Sushi was $0.70. As of September 1st, it’s hovering above $10.00 with a fresh Binance listing to boot. It appears Vitalik is not fond of Sushi as it seemingly is draining liquidity from Uniswap and stealing Uniswap’s thunder.
So far the only strategy toward generating long-term fees that I see is some kind of weird financial attack to grab liquidity and steal network effect from Uniswap. And I’m pessimistic on that strategy.– Vitalik Buterin
We’re in a fascinating time in history right now. It seems as if there’s a new DeFi fad every week. Is this greed shining between the cracks? Or perhaps these projects are here to withstand the test of time and will become the most prominent cryptocurrency projects. Only time will provide any answers. I’d wager it’s going to be a mix of both, with the majority failing spectacularly as compared to the 2000’s dot come bubble. Uniswap has been one of those golden eggs exploding in volume. As of yesterday, Uniswap surprised Coinbase’s 24 hour volume – Wow!
All I have to say is this: If it’s too good to be true, it probably is. Manage your risk appropriately. When Buterin speaks – listen.