Every now and then you come across in cryptocurrency news, hack or pull the rug in a Decentralized Finance (DeFi) Request. Sometimes the founders are the ones surreptitiously escaping with all the cryptocurrency in such an app, and sometimes it’s software glitch In the code that allows a person to steal a lot. As a result, millions of euros in cryptocurrency are lost. Charles Hoskinson, founder of Cardano (ADA), expects many of today’s popular DeFi applications to crash in the coming years because of this.
DeFi and the test of time
in a Live broadcast Yesterday, Hoskinson shared his thoughts on the current DeFi space and Cardano’s future role in it. He states, among other things, that many DeFi applications still rely primarily on “hopes and prayers.” But this will eventually ensure that the now-familiar application will not stand the test of time:
“Unfortunately, many projects in this space will not stand the test of time. We will witness a major extinction in the next five to ten years.”
“Many of you are tired of the staggering cost, lack of clarity, and low application production quality in the DeFi space,”
The goal is for Cardano to improve vulnerabilities in DeFi developments. The project aims to do this, among other things, through the development of certification standards.
Scammers make billions
Hoskinson’s statements are not without foundation. For example, previous research by Chainalysis showed that fraudsters managed to make more than $7.7 billion in 2021 through back-end withdrawals.
Back-out withdrawals were a very common scam. This type of fraud accounted for 37% of all scams looted in the crypto space. This represents an increase of at least 81% compared to last year. However, the turnover of scammers in 2021 was much lower than in 2019, which is a positive development.
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