Web3 Dev Andre Cronje Says DeFi is Here to Stay
2022 was not a great year for decentralized finance (DeFi). The industry saw implosion in itself thanks to the unsustainable high yields that eventually caused the model to collapse. But DeFi is far from dead.
A similar sentiment was echoed by prominent Web3 developer Andre Cronje, who said he does not believe that high yields are “long gone” and that DeFi is seeing almost “zero growth.”
DeFi Will Still Simply be DeFi
At present, the real yields for ETH, USDT, DAI, and USDC are relatively higher than in 2020, even amidst a rather inactive market following a brutal year. Typically, real yields offered by DeFi protocols are from the lending market and trading fees. Investors who resorted to shorting had offloaded their tokens. But according to Cronje, this cohort of market players isn’t confident enough yet to close their positions, which would be the “real yield low point.”
The space is currently stuck in a low volatility phase of a prolonged bear market. Hence, Cronje stated that he does not believe the period of high yields is “long gone” since it is similar to comparing “the current market with an unsustainable and highly delusional market peak” instead of its progression.
In a recent blog post, the Yearn.Finance inventor said,
“If you plot a growth chart on TVL, yield, and trade volume, and you flatten the curve to avoid oscillating, it is a clear linear growth chart. On every feasible metric, real yield and defi have grown substantially.”
Drawing a comparison to the dot com bubble, the developer said the period did not destroy the internet and requires a next narrative.
“It was those projects that were given birth during that insanity that became the anchor products we use today.”
He further said that DeFi does not need a new narrative or a “shiny new toy” to work. Cronje asserted that DeFi, along with other blockchain verticals such as social media, gaming, art, news, etc., is here to stay. Having said that, he admitted the limitation in the current state and access to the underlying technology.
Bullish DeFi Forecasts
Heavy deleveraging pressures triggered the collapses of multiple prominent crypto companies in the latter half of 2022. The total value locked (TVL) fell by over 76% during the same period. However, experts believe these failures will pave the way for “grander innovations ahead.” This was revealed by OKX’s recent report, which predicted the space to experience “revitalization” in 2023.
Besides, blockchain-focused institutional asset manager Pantera Capital stated that DeFi will be the foundation of the crypto industry’s next cycle.
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Text source: CryptoPotato
