Victor Ugochukwu · Oct 21, 2020 . 5min read
Drastic growth in DeFi value is ‘almost scary’, says analyst Joseph Young
DeFi sees five-fold growth in value to $2.74 billion. Analyst Joseph Young calls the drastic climb almost scary and not a good sign.
By Shilika · Jul 21, 2020 . 5min read
Crypto analyst Joseph Young tweeted on July 19 about a five-fold growth in total value locked in DeFi. The figure has now reached $2.74 billion. Young expressed concern about this fast growth, calling it scary and ‘not a good sign.’
In a couple of tweets, he explained that the total value of DeFi has increased five times since 2019. According to him, ‘troubled projects’ were now migrating to DeFi for better value, which might not be a good sign. Young also shared a visual representation of the growth, which marks the Compound Dominance at 23.24 percent.
The graph shows that the total DeFi value crossed $1 billion in February, but dropped to $500 million again. Since May, the value increased exponentially and it finally crossed $2.5 billion in July. A long list of companies are associated with DeFi. Some of them are Aave, DeFiner, Augur, Uniswap, Flexa, DeFi Snap, etc.
Young also stated that projects moving to DeFi were trying to instill a sense of FOMO (Fear Of Missing Out). His tweets evoked several responses from the Twitterati, who had divided opinion on the subject.
A Twitter user attributed this growth to yield/token farming. Another claimed that DeFi is a ‘rock-solid DLT use case’ and can be trusted.
Another user named James – NorskKiwi commented, “Defi is essential infrastructure. If your ecosystem doesn’t have a stable coin, an oracle, and a host of other things you limit your smart contract/dapp potential.”
However, most crypto enthusiasts agreed that the buzz around DeFi might be temporary. A Twitter user called it parabolic but unsustainable, which sums up Young’s tweets.
The possible cause
One of the causes behind this migration could be the COVID-19 pandemic, which has affected the economy globally. People are finding it easier to rely on Decentralized Finance as the stable coin is not controlled by the government and is essentially immune to volatility. Amidst this large shift in market, crypto enthusiasts and beginners have a choice to make regarding their financial freedom.
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Victor Ugochukwu · Oct 20, 2020 . 5min read