- Waves founder, Sasha Ivanov, recently commented on the growing interest in DeFi.
- He believes that DeFi could be on the same path as ICOs, which could result in a bubble.
- While he believes that DeFi has great potential, he doesn’t want to see it wasted.
Only a few short years back, ICOs were the prime way of getting new coins launched and starting the new project. Investors were willing to seek out the next big opportunity, which provided the developers of such projects with the funds needed to continue their work.
However, when the crypto boom took place in 2017, two problems emerged — an excessive amount of scams posing as ICOs had plagued the industry, and the number of projects alone skyrocketed. This was a problem as most projects were weak, and even worthless.
Anyone with a computer aimed to piece together whatever they could to try and get some money from investors willing to buy new coins. And, of course, it all ended quite disastrously.
Now, Waves CEO and founder, Sasha Ivanov, fears that this scenario will repeat itself, but this time with DeFi.
Ivanov’s fears are not unjustified, however, as DeFi has been one of the hot topics in the crypto world recently. Since everything with potential tends to become rather popular, and attract an enormous amount of attention, it is common for even the best of ideas to be exploited and worn out as a result.
DeFi is growing similarly to ICOs in 2017
Ivanov posted a series of tweets yesterday, June 23rd, addressing the surge of interest in DeFi. He compared the influx of funds to the one seen in 2017, when ICOs were on the rise. He also noted that DeFi, in their current state, resembles existing financial systems.
As such, they can follow a rather familiar path, which leads to bubbles, defaults, and even hacks. This was seen in and out of the crypto industry in the past, after all.
That doesn’t mean that he believes DeFi is bad — on the contrary. He sees great potential in the new trend, and wishes to warn the industry before DeFi suffers the same fate as ICOs. While DeFi could potentially survive it, Ivanov is still concerned of negative consequences on its long-term development.