- Charles Hoskinson has predicted a crackdown in DeFi, similar to the one witnessed by ICO projects in 2017.
- Hoskinson says that Cardano has prebuilt the requirements for second generation DeFi applications.
- The Ethereum-killer plans to power the winners of the DeFi space on its blockchain network.
Charles Hoskinson, founder of Cardano, is of the opinion that the blockchain network is prepared for “RealFi,” the second generation of DeFi applications that have much more utility and facilitate governance and decentralization.
Cardano likely to hit all-time highs with the second wave of DeFi applications
Charles Hoskinson states that Cardano was developed for the second wave of DeFi applications. Hoskinson expects the current decentralized finance applications to be subject to crackdown or regulations from the US Securities and Exchange Commission (SEC).
SEC Chair Gary Gensler said that DeFi is not “exempt from regulations” and referred to it as “a bit of misnomer,” stressing that there are aspects that are still highly centralized. Gensler’s statements in August 2021 made it clear that projects in the DeFi space can expect a crackdown, similar to what was witnessed by Initial Coin Offerings (ICO) in 2017.
Hoskinson expects a new wave of DeFi projects focused on identity and decentralized governance to take over the first generation.
The winners of the future in the DeFi space are going to have liquidity and interoperability, the ability to move multi-chain. And finally, cost predictability is such an important thing… It’s so bizarre how we just tolerate massive swings in the price of doing business.
Since Cardano’s utility is nearly the same as Ethereum, proponents expect the former to be exposed to similar “network effect” and “adoption” as the latter.
Referring to DeFi as a “bubble,” Hoskinson claims that projects need to decentralize. There is a need for certification, insurance, and metadata identity.
According to the founder of the Ethereum-killer, DeFi on Cardano will be significantly harder to regulate.
Developers in the industry have felt the need for a higher throughput blockchain network, which is cost-effective. The list of Ethereum’s competitors is a long one – Cardano, Solana and Polkadot rank amongst the top choices for projects and traders in the ecosystem.
Hoskinson explains that a lot of design choices that Cardano made, the market is not aware of them yet. Once the projects that are currently in the commercial pipeline come online within the next year, there will be millions of users on the blockchain network.
The founder of Cardano thinks in terms of real-world use cases and stresses on “RealFi,” that according to him is “DeFi-plus-plus,”
The developments and upgrades in the Cardano ecosystem are bullish for the native asset’s price. Simon Dedic, the Managing Partner at Moonrock Capital, believes that ADA looks super bullish in the current cycle.
Dedic recently tweeted:
FXStreet analysts state that ADA price needs to stay above $2.2 to breakout; a drop below that level could lead to consolidation.
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