Decentralized finance (DeFi) has taken Ethereum by storm over recent months. This sector of the crypto and ETH economy has grown exponentially, both in terms of capital/dollar value and in terms of active users.
While this segment of Ethereum has undoubtedly bolstered the project, founder Vitalik Buterin is steering clear for the time being.
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Ethereum Founder Vitalik Is Not Big on Yield Farming Just Yet
Vitalik Buterin, the founder of Ethereum, commented on August 31st that he wants to steer clear of yield farming until it “settles down.” He specifically referenced a comment from an investor saying that there is a vast amount of human capital entering YFI:
“I personally am steering clear of the yield farming space completely until it settles down into something more sustainable. But I’m not particularly a “smart mind in defi” so….”
I personally am steering clear of the yield farming space completely until it settles down into something more sustainable. But I’m not particularly a “smart mind in defi” so…. https://t.co/1Db86JwP0D
— vitalik.eth (@VitalikButerin) August 31, 2020
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Not the Only Skeptic of Yield Farming in the Short Term
He isn’t the only skeptic of Ethereum’s decentralized finance space, at least in its current, short-term meta.
Tony Sheng, a former analyst at Multicoin Capital, recently noted that he is “pretty scared” by the “grocery coin thing.” The term “grocery coin” was made in reference to the vast number of DeFi protocols and coins that have adopted the names of common foods. In Sheng’s words:
“i’m pretty scared by this grocery coin thing. not for defi insiders who know how to diff contracts and manage their own risk, but for their friends and friends of friends who show up to play the “game.” A big loss of funds is inevitable be it a hack or a scam.”
i’m pretty scared by this grocery coin thing
not for defi insiders who know how to diff contracts and manage their own risk
but for their friends and friends of friends who show up to play the “game”
a big loss of funds is inevitable be it a hack or a scam
— Tony Sheng (@tonysheng) August 19, 2020
Another skeptic is “Weeb Mcgee,” an Ethereum developer whose real name is John Lim. Weeb has become a prominent member of the Ethereum community after creating a number of tools that allow users to bolster their DeFi interactions.
“Yep. I’m on the record saying yield farming meta is an unsustainable zero sum game. The big winners here are protocols benefitting by capturing permanent value via inflated prices / sudden movements of funds,” Mcgee said.
It is currently unclear how Ethereum DeFi will transition from its current state to one that is more sustainable in the longer run.
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