Vitalik Buterin Warns Against Yield Farming DeFi

Ethereum CEO Vitalik Buterin has given his displeasure at the way the yield farming frenzy Defi News 2020
Ethereum CEO Vitalik Buterin has given his displeasure at the way the yield farming frenzy Defi News 2020

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Ethereum CEO, Vitalik Buterin has given his displeasure at the way the yield farming frenzy has been going after a new project reportedly locked up billions of dollars in value.

In his statement, the CEO said he was very skeptical about the way investors were swarming into the yield farming frenzy projects and the way the values are skyrocketing. 

Furthermore, he said he was suspecting the way the projects were locking down values and printing tokens to boost their investor’s profits on a daily basis. Giving a key example of the projects that investors need to be careful before joining is Sushiswap that has remained unaudited. Investors keep flocking in because of the profits.

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In simple terms, yield farming frenzy has allowed investors to lock up so many funds in projects that are present on pools like Uniswap and the like. For hosting the projects, the pool gets a small amount of profit from the investors on the projects.

Holders of tokens in the pools can in turn lock up their tokens on newer DeFi projects like Sushiswap which has been the love interest of many investors. Some other tokens which deal with governance like Yearn Finance allow traders and investors to have their own say in what happens to the coin in the future.

Yield farming frenzy: Vitalik Buterin says central banks look like jokers

Despite the fact that DeFi projects have seen its profits rise drastically, it has not been free of experts criticism as they have pointed at the negative aspects of the projects.

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In Vitalik Buterin’s tweets where he talked about the yield farming frenzy, he noted that the number of coins that would be printed to keep up with the profit of clients would be very massive. Furthermore, the yield farming projects are making Central banks around the world look like jokers.

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