- Charles Hoskinson mentioned the DeFi network as a bubble.
- Cardano’s design is well organized to accommodate the second wave of DeFi.
- Cardano can host decentralized applications (dApps) in the DeFi space.
On September 17 (Friday) in an interview the founder of Cardano, Charles Hoskinson mentioned the decentralized finance (DeFi) network as a bubble. Also, he noted, the vibration in the DeFi space means people have seen value in the sector.
Accordingly, Charles Hoskinson explained the reason, why he feels DeFi is in a bubble. He said some projects have small and fewer members of the development team, shortage of ample liquidity, but these projects such as unicorns in Silicon Valley are worth billions of dollars. Even more, Unicorns also took many years before hitting a $1 billion valuation.
Moreover, along with a DeFi space, small projects are achieving this accomplishment within few weeks, featuring that there is something technically wrong with their valuations. Finally, Charles Hoskinson expects some progression in the sector.
Furthermore, in his opinion, none of the networks that support decentralized finance (DeFi) have met the requirements such as governance, certification, insurance, and regulations. Charles Hoskinson notified Cardano’s design, well organized to accommodate the second wave of DeFi.
Henceforth, Hoskinson expects the current decentralized finance (DeFi) applications to be subject to crackdown or regulations from the US Securities and Exchange Commission (SEC). Gray Gensler, Chairman of SEC has made a statement in August 2021, he made it clear that the projects in decentralized finance (DeFi) space can expect crackdown, which similar to the one witnessed by Initial Coin Offerings (ICO) in 2017.
In Addition, after Alonzo’s hard fork upgrade, introducing smart contract functionality in the Cardano network. Now Cardano can host decentralized applications (dApps) in the DeFi space.