Charles Hoskinson, founder of popular altcoin Cardano, said that DeFi is at its peak and we should expect big changes in decentralized finance. Charles Hoskinson described this altcoin market as a “bubble ready to burst.” So what’s the rationale for saying this, and what does he think will replace DeFi?
SEC Chairman Gensler says big changes are coming
Decentralized finance or DeFi is a general term that refers to financial products and services that are accessible to everyone. Moreover, it is a system of financial products written on Blockchains that allows buyers, sellers, lenders and borrowers to interact. It differs from traditional finance, which is dominated by intermediaries such as banks or brokerage firms. Participation requires providing government-issued identification such as social security or passport information. Since summer 2020, the volume of DeFi altcoin projects and money locked in DeFi has been growing exponentially. Ethereum is the biggest player of them all.
But rising stars like Binance Smart Chain and new players like Solana and Terra are consuming Ethereum’s market share. An important consideration is that regulatory oversight is minimal. However, that may not last long as SEC Chairman Gary Gensler says big changes are coming. cryptocoin.com As we reported earlier, Gensler in particular said that many altcoin projects that label themselves as decentralized finance are not at all like that. And with “centralized” features, this puts them directly under the scrutiny of the US securities regulator.
Charles Hoskinson: The DeFi altcoin market is a bubble ready to burst!
Sharing his observations, Charles Hoskinson said that the DeFi altcoin market is in a bubble. According to Charles Hoskinson, this market is no different than seen in the ICO spree of 2017. Expanding on his comments, Charles Hoskinson said that being in a bubble isn’t necessarily harmful. Charles Hoskinson comments on the subject as follows:
But just because it’s in a bubble doesn’t necessarily mean it’s in bad shape. It just means that people understand there is a value, but the market has a hard time pricing that value.
In support of this view, Charles Hoskinson mentioned that altcoin projects worth over a billion dollars are proliferating with small teams and low liquidity. According to him, this is a sign of the DeFi industry in decline.
Charles Hoskinson: This market is no different than seen in 2017’s ICO frenzy
Charles Hoskinson also cited recent comments by Gensler, in which he said the SEC is looking for ways to regulate the market. How these regulations will unfold is everyone’s curiosity. But the great fear is that the SEC is perhaps undermining the industry by forcing projects to follow users and request identification for participation. However, something else could replace this market. And as Charles Hoskinson said, this next-gen DeFi is up for grabs.
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