Ethereum co-founder Vitalik Buterin said he did not practice yield farming, and urged not to succumb to the hype around the decentralized finance (DeFi) industry.
“Yield farming” means increasing rewards for liquidity providers using high leverage. The more liquidity a provider provides, the higher its reward.
Buterin wrote on Twitter that did not use this practice. He once transferred several coins to Uniswap and withdrew them, earning only a few percent on commissions. On this, Buterin’s experience with similar incentive systems was over.
Buterin urged users not to succumb to the “fever” of decentralized finance. Even for those who understand the principles of DeFi, Buterin advised to “sit back” or invest only small amounts. He added that there are other types of Ethereum-based decentralized applications that are worthy of user attention.
According to DeFiMarketCap data released in June, the total capitalization of DeFi products exceeded $ 2 billion. Previously, Aleks Larsen, senior lawyer at Blockchain Capital , said that the explosive growth of DeFi could lead to the collapse of the industry. The founder of the Waves Association Alexander Ivanov adheres to the same position . He believes the over-popularity of DeFi could hurt the sector’s long-term development.