DeFi and the risks: Possible bubble?

Knowing that the market for cryptomonies has been very volatile from the beginning, and this attracts a lot of investors and traders. However, personalities who in the past contributed to this commercial boom, such as Sasha Ivanov, founder of the Wave Association, warn the community of the possible risks that come with the development of DeFi (Decentralized Finance Technology), referring to the formation of a possible financial bubble.

Ivanov emphasizes the rise of this new DeFi market, mentioning the boom it could quickly take. This, with the possibility that the accelerated interaction of the community will negatively influence its price within the market, generating incessant peaks of unstable prices, a scourge ironically counterproductive when trying to achieve overall stability.

Likewise, the founder of the Wave Association compared the current situation with the bubble that was generated around the ICOs. Already in 2017 he commented that „Please don’t make a new ICO bubble with the #DeFI“, through his social network account Twitter.

Firm belief in the #DeFi: Are there concerns?

Sasha Invanov expressed his confidence in the DeFi, which will be interesting with its eventual mass implementation in the cryptomint industry due to its developed structure. The DeFi technology, unlike ICO, is more reliable because of its innovative features.

Ivanov then describes the DeFi tokens as „clearly useful, having a mechanics that gives them value“. He says that in the world of cryptomonies, when something turns out to be innovative and attractive, everyone wants to invest there and this generates volatility. In other words, at some point their popularity will be responsible for giving way to pronounced and volatile instability. However, in a way this is a concurrent part of the process.

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DeFi and the risks, concern shown by Sasha Ivanov. Possible bubble?
DeFi and risks, concern shown by Sasha Ivanov. Possible bubble?
Considering its complexity, DeFi is likely to have a more specific type of attention, a not-so-generalized but marked audience, and the presence of better-prepared investors.

Although this may be the case, the possibility of volatility in The News Spy remains, leading to future spikes and falls in DeFi prices.

For Ivanov, such volatility „can seriously damage the otherwise bright prospects for massive DeFi adoption.