Decentralized finance, commonly known as DeFi, is currently the hottest segment of cryptocurrencies.
This is primarily because it goes far beyond the cryptographic goal of excluding financial intermediaries such as banks from the payment process. It eliminates crypto companies and leaves only autonomous, self-executing smart contracts that allow lending and trading platforms to execute transactions without human control.
DeFi, as its proponents claim, is the ultimate goal of decentralization, a transaction that does not require human input.
So what do you think of DeFi’s situation, with more than 20 cryptocurrencies crashing last weekend and a 70% drop in news that acclaimed developers have left the industry?
Perhaps Andre Cronje is too central to the decentralized project he created.
The South African developer and his frequent partner Anton Nell were the key to a huge number of very important DeFi projects. In particular, the scalable Fantom blockchain and Yearn Finance are high-profit agricultural projects with nearly $ 3 billion fixed to the protocol at the end. week.
reference: PYMNTS DeFi Series: What is Yield Agriculture and Liquidity Mining?
Yearn’s YFI tokens fell 7% over the weekend. This is because Cronje has removed his Twitter account and updated his LinkedIn profile to reflect that he is no longer a board member of the Fantom Foundation trying to build blockchain support and infrastructure.
Following Nells, another 10.5% crater was created within an hour on Monday. Tweeted announcement The pair “decided to close the chapter that contributes to the defi / crypto space.”
Important individuals
The plunge in prices (many of which have returned more or less) “reiterates how important the reaction to the news is to the value of cryptography,” said Raj, founder of the Indian Blockchain Alliance. Kapoor told The Economic Times of the country..
Many tokens related to projects founded by Cronje, such as the new automated market maker Solidly (down 70%) and the lending protocol Iron Bank (down 50%), as well as many unrelated to the Cronje project but built on Fantom. It is worth noting that the tokens in have been removed. As much as 30%.
Cross-chain Bridge Protocol Multi-chain has decreased by about one-third, but has been steadily decreasing since the January code bug led to a $ 1.2 million hack ($ 1 million returned). ..
Read this: PYMNTS Crypto Crime Series: $ 1 billion hacked and cross-chain cryptocurrency payments could be made in Jeopardy
Michael Kong, CEO of the Fantom Foundation, concluded that part of this reaction was the result of the wording of Nell’s tweet: “There are about 25 apps and services that will end on April 3, 2022.”
Kong says he needs to “reveal a lot of false information around him.” Said, “Anton, who works with Andre, tweeted that he has” finished “25 projects. This was misunderstood. They have “finished” their involvement, but have handed over everything they have done to the existing team. “
Leading Yearn developer attending under the name Bantag on March 6th Tweet “Are those who fill YFI aware that Andre hasn’t been working on YFI for over a year? And even if he does, 50 full-time people and 140 part-time contributions? Is backing things up. “
This also has an aspect related to the number of new people entering DeFi. This means that the decentralized part will be managed by the votes of the governance token holders once the project is started. Successful projects are typically done by many autonomous developers and are rewarded when the updates they propose are approved.
see next: DeFi series: Unpacking DeFi and DAO
What’s more, Cronje’s decision wasn’t unexpected. According to an August 2020 Decrypt interview, he rarely benefits from the projects he develops and previously “angered” the industry, citing the “toxic” and “hostile” DeFi community. I did.
Individuals like Cronje are influential, but once they begin to control the DAO governance mechanism, they are no longer important. But many investors don’t seem to know that.
When Senator Elizabeth Warren (D-Mass.) Invests in what she recently called “the most dangerous part of the world of cryptocurrencies,” do people understand what they’re working on?
Read here: Senator Warren calls DeFi the “most dangerous” part of the code at Senate hearings.
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