Ethereum co-founder Vitalik Biderin compared the economy of most DEFI protocols with cash, which continuously prints new tokens for liquidity providers.
He believes that the aggressive distribution strategy of the digital assets of many projects (Yield Farming) to ensure annual yield at the level of 50-100% is irresponsible, since excessive supply increases inflation and has a significant pressure on the price.
Biderin also warns against the naive optimism of investors aimed at the long term. It indicates the inability of many startups to generate a cash flow without paid applications, which ultimately will lead to the impossibility of maintaining the cost of the project and the payment of commissions.
Expressing his pessimistic attitude to such a strategy, he compared it with the monetary policy of central banks, which without stopping the money.
The growth in the popularity of DEFI also led to an increase in the loading of the Etheric network and transactional fees, which increased the yield of miners.
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