Vitalik Buterin likens DeFi yield farming to the Fed’s printing press

Ethereum co-founder Vitalik Buterin placed the yield-farming economy on a par with the Federal Reserve’s aggressive monetary policy.

“I am avoiding this space until it takes on a more sustainable form,” said Buterin.

I personally am steering clear of the yield farming space completely until it settles down into something more sustainable. But I’m not particularly a «smart mind in defi» so…. https://t.co/1Db86JwP0D

— vitalik.eth (@VitalikButerin) August 31, 2020

Yield farming consists of earning rewards in the protocol’s native tokens for lending or borrowing, or for providing liquidity to decentralized exchanges and governance. The most active users receive more tokens, their rising value feeds the current DeFi boom.

https://forklog.com/chto-takoe-dohodnoe-fermerstvo-v-defi-i-kak-na-nem-zarabatyvayut/

For Buterin, the aggressive issuance of governance tokens in such DeFi projects exerts pressure on the prices of coins that are printed nonstop to pay liquidity providers.

“Seriously, given the enormous volumes of coins that must be printed nonstop to pay liquidity providers in these systems with 50-100% per-year yields, major central banks look as though they’re all run by Ron Paul,” Buterin said.

Seriously, the sheer volume of coins that needs to be printed nonstop to pay liquidity providers in these 50-100%/year yield farming regimes makes major national central banks look like they’re all run by Ron Paul.

— vitalik.eth (@VitalikButerin) August 31, 2020

Earlier, the head of the bitcoin exchange OKEx, Jay Hao не исключил, that the current “bubble” in the DeFi sector would burst, but added that the long-term prospects of decentralized finance cannot be ignored.

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