DeFi coins have faced a sudden dump after a record rally. Bitcoin billionaire Cameron Winklevoss rejected the claim of many people who say that the DeFi craze is similar to the ICO bubble in 2018.
Growth of DeFi
Decentralized finance is now a flourishing and growing thing in the cryptocurrency space. A lot of people have jumped into DeFi due to its high potential yield.
Many voices in the crypto community compare the DeFi growth with ICOs of 2017-2018. ICO then got disrupted after the legal authorities took notice of the initial coin offerings and set strict rules and regulations. The same is expected for the DeFi coins which have got a sudden push to move high.
Ryan Watkins from Messari also draws a comparison between DeFi and ICOs. “The last couple weeks in DeFi have been an absolute bloodbath. But keep in mind bull markets never go up in a straight line. In the 2017 ICO boom ETH pulled back 20%+ seven times before it peaked in January 2018. So far in this bull market we’ve only experienced one,” Watkins stated.
Differences rather than Similarities
However, some people point out the difference between ICOs and decentralized finance and even favor DeFi. In these people, Bitcoin billionaire Cameron Winklevoss is the top one who thinks that DeFi has potential due to its nature of real case use. Gemini Co-Founder said:
“DeFi is not the same as the 2017 ICO craze. Back then, money was raised on shitcoin white papers written in a coffee shops. DeFi is already live and working in the wild. Billions of dollars are at work earning positive yield. This isn’t hypothetical vaporware, this is real.”
However, people have raised some questions on this tweet. A famous YouTuber and analyst, Tone Vays, said,” How are those dollars working? In other words, where do the dollars go?”
Messari accepts the potential of DeFi to some extent in crypto space.” In other words, DeFi hype is strong, but not strong enough to make a dent in broader crypto asset markets,” it stated.