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Is the Decentralized Finance Space in a Bubble? What to Consider


The decentralized finance (DeFi) space has been trending in the cryptocurrency industry so far this year thanks to various developments and trends seen in it, including the introduction of governance tokens and yield farming. The rise of DeFi has seen some market commentators claimed it’s the next bubble in the cryptocurrency space, likening its rise to the 2017 initial coin offering (ICO) bubble that saw the crypto space’s market cap surpass $800 billion, and helped bitcoin reach its near $20,000 all-time high. The DeFi space was born in August 2017 when decentralized exchanges and lending protocols started to emerge on the Ethereum blockchain. Bitcoin’s Lightning Network is seen by some as a decentralized finance project too, and contributes to the total amount of value locked in DeFi, which according to DeFiPulse is now at $2.8 billion It wasn’t until May 2019 that DeFi saw its total value locked surpass $500,000. By February of this year, over $1 million were locked in the space, and that figure has nearly tripled over the last few months. This meteoric growth certainly supports the bubble case, but there are various factors to consider. There are significant differences we need to point out when comparing the hype behind initial coin offerings, and the hype behind decentralized finance so far. Read More...



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