The sectors of decentralized finance (DeFi) and non-fungible tokens (NFTs) are at a stage of development where the market struggles to price them fairly. That view was voiced by Charles Hoskinson, the head of IOHK, the company behind Cardano, in an interview with Forkast News.
“I think there is a bubble in the DeFi market. It’s a common phenomenon—the NFT and DeFi are simply the latest.”
Hoskinson compared the DeFi market situation with the ICO bubble of 2017. He stressed that the formation of a bubble is not necessarily bad. In his words, DeFi are the “logical next step” for crypto investors.
According to IOHK’s chief, broad adoption of DeFi will be aided by the emergence of “decentralized application stores” and the adoption of cross-chain solutions. By “stores” of dapps, Hoskinson means platforms like Google Play and the App Store.
In August, the head of the SEC warned about tighter regulation of DeFi and stated that the decentralized model of projects in this space does not give them immunity from the Commission’s oversight. Hoskinson regards the agency’s attention as evidence of the sector’s rapid development. He also stated that bureaucratic hurdles will only benefit the industry.
Earlier, the IOHK team activated the Alonzo upgrade on the Cardano mainnet. After the hard fork, developers gained the ability to deploy smart contracts on the blockchain and to build daaps on top of them.
As previously reported, 99% of smart contracts deployed on Cardano remain inactive — they are under a temporary lockdown.
Follow ForkLog’s Bitcoin news on our Telegram — cryptocurrency news, prices and analysis.