Ethereum co-founder Vitalik Buterin says that many participants in the DeFi market underestimate the risks associated with smart contracts. He said this on the Unchained podcast.
When host Laura Shin asked about the main risks for users of the DeFi sector, Buterin replied:
“In my view, the main risk is that many underestimate the risks of smart contracts.”
He noted that interest rates in DeFi services are significantly higher than in traditional banks, making their products more risky. Buterin expressed doubt that even platforms that have undergone audits can guarantee stable payouts.
“DeFi is still in good shape, but you shouldn’t act as if this is a place where ordinary people should put all their savings,” he said.
Buterin believes that high interest rates are a temporary phenomenon tied to the DeFi hype.
“As soon as the temptation fades, you may well see rates fall to near-zero levels,” he added.
The market for decentralized finance has shown exponential growth in recent months. The total value locked in DeFi services reached $3.69 billion. Of this, $1.04 billion (28.22%) goes to Maker protocol, which surpassed $1 billion on Monday, July 27.
One of the side effects of rapid DeFi growth is a sharp increase in Ethereum network fees. To address the problem, Buterin proposed a radical overhaul of how miners are compensated, but his proposal was not adopted by all members of the community.
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