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DeFi Industry Surged to $3 Billion in Two Weeks, Worries Emerge
Summary: Decentralized finance (DeFi) applications lock up a total value of 3 billion dollars now, as DeFi Pulse’s data shows. The industry surged from $2 billion to $3 billion in two weeks, possibly stimulated by the launch of Compound’s token COMP last month. COMP started a mode called yield farming that rewards liquidity providers with tokens ...
Decentralized finance (DeFi) applications lock up a total value of 3 billion dollars now, as DeFi Pulse’s data shows. The industry surged from $2 billion to $3 billion in two weeks, possibly stimulated by the launch of Compound’s token COMP last month.
COMP started a mode called yield farming that rewards liquidity providers with tokens at a high-leverage level. Given the risky token incentives, DeFi may carry bubbles that are doomed to collapse. Aleks Larsen, a senior associate at Blockchain Capital, commented on DeFi as follows:
“One can imagine a situation where an outside protocol creates incentives that — without any action of its own — can drive dangerous behavior in another protocol and ultimately result in cascading liquidations and user losses.”
By Lily Yang
Tags: DeFi
Link: DeFi Industry Surged to $3 Billion in Two Weeks, Worries Emerge [Copy]
