Profit taking in DeFi drags Ethereum down
With the downturn in the overall crypto market, Ethereum is showing its largest weekly decline in 5 months, driven by the large outflow of capital from the DeFi.
The downturn in the DeFi market was already more than healthy at this point, after it increased its capitalization by 92% in just 30 days.
Strong speculation, overconfidence and lack of regulatory frameworks in decentralized finance created the perfect breeding ground for criminal projects to take place.
Overdue food causes negativity in DeFi and Ethereum
Pizza, Hotdog and Sushi were some of the highlights this week at DeFi, smart contracts that offered absurdly high returns for those who choose to use them. The downside is that these foods expired too quickly.
Before their first 24 hours of life, these “projects“ suffered from shameless Pumping and Dumping, a behavior better known as Pump and Dump.
These cases were generated by Bitcoin Profit farmers who inflate the price of the token, and then come out bringing it almost to zero.
These dangerous meals were born out of a protocol that had stirred up enthusiasm in the DeFi ecosystem, called Yam Finance; and that just caused a furore by accidentally blocking $750,000 in their smart contract, which dragged the price of the token quickly to 0.
Some analysts think we are experiencing a speculative bubble at DeFi, similar to the one experienced in 2017 with the ICOs, where regulations were the only thing that stopped it; sooner or later the SEC could go after DeFi.