DeFi Industry Facing Serious Issues Related To Uniswap And Network In General

Nobody is surprised by the DeFi industry’s downturn; it has been declining since the end of 2021, and the demand for risk and decentralized assets has generally decreased since the start of the rate hike cycle.

An on-chain researcher claims that there is a tremendous quantity of money on chain searching for yield, which causes practically every chance to yield negative risk premiums that Uniswap’s pools cannot bear.

Market data reveals that there are stablecoins worth over $70 billion on the Ethereum network that require useful use cases. Unfortunately, DeFi cannot provide investors with what they genuinely need in its current form.

DeFi became less viable due to the absence of creative and successful examples, which also generated risks in the ecosystem that new investors could not bear. This resulted in a lack of new investment into the sector.

DeFi is currently attempting to address the incorrect issue

The researcher contends that by attempting to fabricate a growth narrative for a historic influx of liquidity, DeFi is currently attempting to address the incorrect issue. The market does not require it at this time.

Contrarily, the DeFi community must give up the narrative put forth in 2021 and instead concentrate on creating long-term sustainable sources of innovation that will support the growth of the DeFi business. The analyst questioned the Uniswap team directly since they are continuing to construct and enhance their successful business strategy that has been in place for the past three years without updating it to take into account the current status of the markets.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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