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MyEtherWallet CEO and founder Kosala Hemachandra brushed aside concerns following a major sell-off in the DeFi market which saw it lose $ 1 billion in value.
DeFi tokens such as YFI and LINK have declined exponentially from their peak in late August as investors will re-focus on Bitcoin in light of its rally above $ 13,000.
The vast majority of DeFi tokens are built on the Ethereum blockchain, which adds a fairly crucial variable as when Ethereum 2.0 becomes available, projects will be able to run more smoothly thanks to scalability improvements.
“We’ve already seen huge drops in DeFi’s Total Locked Value (TLV) and will likely see them again.” Hemachandra said.
“It’s easy to see these nocturnal or multi-day moves as slowing down or reading too much on the market, but the reality is that DeFi has increased more than 1,700% this year in TLV. Price fluctuations are not uncommon in new asset classes and while DeFi is certainly an experiment, it is garnering interest that makes me immensely excited about its future. “
In what was eerily reminiscent of the 2017 bull run, altcoins like Ethereum and its subsequent ERC-20 tokens were sold against Bitcoin during the recent run.
DeFi will likely bounce back when Bitcoin re-enters a period of consolidation, as this is the time for traders to look to lock in profits and diversify into more speculative assets.
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