DeFi is too ‚outrageous‘, says MyEtherWallet CEO

The hype can be frantic and disorganized.

The niche of crypto space comprising decentralised finance (DeFi) has reached a frenetic state within the crypto currency industry, signalled by exuberant high prices and rampant speculation.

„DeFi is the new overrated concept at Ethereum,“ MyEtherWallet CEO, or MEW, and founder Kosala Hemachandra told Cointelegraph in an interview. „The scandal is too much, as if everyone is running around trying to figure out what the next big thing is and then putting a ton of money in without doing enough research,“ ,he said.

In 2019, DeFi probably brought to mind different concepts than those we see today. DeFi, at its core, existed as a way for people to borrow, lend and store funds based on their holdings of cryptomoney.  However, over the course of 2020, DeFi has soared, driving projects created out of thin air, gaining significant attention as speculators move their funds around in search of the best returns on speculation in the price of coins and interest bearing vehicles. Hemachandra’s comments refer to this new advertising movement.

The founder of MEW explained that DeFi has both losers and winners, and that the winners add more enthusiasm to the movement. ,As a result of the hype, transaction fees on the Ethereum network have soared in recent weeks, sometimes costing users between $40 and $80 per transaction.,

„That is the main cause of the problem of the price of Ethereum gas, from now on,“ said Hemachandra. However, he pointed out that the current situation is an opportunity for the industry to adapt to the challenge and improve the solutions around Ethereum, and explained that the tension can stimulate growth.

Others have noted that another potential problem with DeFi comes from Ethereum’s low transactions per second.