Finance News

Story: DeFi Market TVL Peaks, Market Saturation Begins: The Vicious Cycle Continues

By Ayobami Abiola

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The Trends

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DeFi Market and the Vicious Cycle

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The Story of Jhon

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Decentralized Finance is here to stay, it has been a booming market since the beginning of the year. The Total Locked Value in DeFi protocols is now at a surprising 10.

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1983 to 1985 which is known as the Video Game Crash of 1983 happened because a lot of low-quality video games saturated the market to the extent that households lost interest.

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Fast forward 2017, Initial Coin Offerings came to life with more than 2000 offerings to attract investors.

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ICO transformed into Initial Exchange Offerings (IEO) in 2019 as trusted exchanges started assisting start-ups to collect funds but with a fee.

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Can you begin to see a trend in all of these?

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DeFis are here promising a lot of goodies to investors. At the heart of many great DeFi protocols is a genuine mission to give to people what banks are not giving them.

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“So I’m up to 63 review #crypto projects. Next up - http://Poo.Finance... I give up. #DeFi”

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Many of the DeFis that are springing up recently are only copies of the smart contracts of great ones that we all know and appreciate.

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Alex Manuskin (@amanusk_) warned investors on twitter not to approve infinite tokens for any random smart contract.

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“If you are not yet convinced that you should NOT be approving infinite tokens to some random smart contract/Dapp, here’s a story of how Jhon Doe lost $140K worth of UNI in their…

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He stated that Jhon only wanted to be the first beneficiary of a new fancy DeFi protocol. He made the mistake of approving that the smart contract should be able to withdraw an…

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“What Jhon doesn’t know, is that once you approved the contract to use ∞ tokens, the contract can take their tokens at any time.

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