Top DeFi tokens continue crashing leading some industry analysts to believe that the DeFi bubble has burst. According to the DeFi pulse, the total locked value in decentralized finance has decreased by almost 10%, since its all-time high.
Although the current cryptocurrency market sees a noticeable downward trend, DeFi tokens are spiraling on a negative downward movement.
Lately, there has been no news of hyped decentralized finance food farms, new token pumps, smart contract breaches, or influencer and exchange shills. Even the most pumped tokens are down by over 90% from its all-time highs.
Industry expert and Nuggets News founder, Alex Saunders took to twitter to emphasize the necessity of making profits while trading.
Alex believes that short term profits are all that it matters as long-term holding might not be a sane thing to do in the ecosystem as tokens continue crashing.
For example, SUSHI dumped over 94% since its all-time high with its price chart resembling that of altcoins between 2017 and 2018. Even top tokens from Curve, Swerve, and bzX are massively down, while Uniswap is down by over 60%.
While speaking at the LA Blockchain Summit, FTX CEO and the current head of SushiSwap, Sam Bankman-Fried, questioned on the validity of DEX volumes. Bankman believes that large incentives like liquidity mining slips away, so also the volumes.
Becoming one’s own bank is something that attracts DeFi as a concept. However, the current DeFi landscape is driven mostly by yield farmers seeking for quicker profits rather than for long-term growth. That itself makes the DeFi bubble narrative more applicable than ever.
ETH 2.0 can definitely revolutionize the DeFi ecosystem that gained significant attraction within a short span. Newer regulations can eliminate the negative aspects of the ecosystem such as clones, rug pulls, arbitrage bots, flawed smart contracts, and scam projects.