фото показано с : invezz.com

Charles Hoskinson, the founder of Cardano, believes that the decentralized finance (DeFi) industry is in a bubble. He said this during an interview on September 17, adding that the space won’t necessarily collapse because it is in a bubble. He further noted that the buzz in the DeFi space means people have seen value in the sector, and they are just having a hard time pricing this value.

Explaining why he believes DeFi is in a bubble, the IOHK founder said some projects have small development teams, lack ample liquidity, but are worth billions of dollars. Hoskinson added that such projects are similar to unicorns in Silicon Valley. However, even unicorns took several years before hitting a $1 billion valuation.

With the DeFi space, small projects are achieving this feat in a few weeks, showing that there is something fundamentally wrong with their valuations. To this end, Hoskinson expects some regression in the sector.  

On top of this, he believes the unregulated wild, wild west nature of the emerging industry will see the US Securities exchange crackdown on the industry in the coming months or years. As such, the next generation of DeFi is up for grabs, seeing as people will shift between protocols to find cost-efficient networks that are more predictable.

He added that the search for protocols that support whatever regulations come in the future will force developers to create more competitive networks. Hoskinson compared this impending change to the ICO revolution that led to the rise of different financing models.

In the interview, Hoskinson said,

I’m overall bullish in the three to five year time horizon, but I think batteries aren’t included. We need to get to that stage. So we need governance, we need certification, we need insurance, we need regulation on these things, metadata, identity, these types of things. But then at the same time, you need to decentralize.

According to him, none of the current networks that support DeFi have met these requirements and maintained some semblance of decentralization at the same time. However, he claims Cardano’s design is well-equipped to accommodate the second wave of DeFi. While he acknowledged that the technology industry evolves rapidly, he believes Cardano has achieved the unthinkable to date.

Hoskinson added that Cardano’s has been playing a game of the future all along. His sentiments come after Cardano completed the Alonzo hard fork on September 12, introducing smart contract functionality in the network. With this upgrade, Cardano can now host decentralized applications (dApps) in the DeFi space.

The post Cardano’s Charles Hoskinson says the DeFi space is in a bubble appeared first on Invezz.

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