Aave chief executive officer (CEO) Stani Kulechov says the yield farming craze for cryptoassets is coming to an end, despite a bullish outlook for decentralized finance (DeFi).
In an interview with Crypto Briefing, Kulechov commented on the current state of DeFi, including solutions to problems facing the industry. Kulechov highlighted the emphasis in DeFi on larger accounts, saying the creation of more democratic incentives could lead to a shift to individual input.
Kulechov also clarified his definition of “decentralized,” noting several DeFi projects failed to meet his qualifications:
“I personally believe that a protocol is decentralized when the founding team’s proposal can be voted successfully against and the team, including its early investors, do not hold over 50% of the tokens.“
Kulechov was particularly sober on the outlook for yield farming, which he said had provided an “interesting” way to reward user behavior with liquidity incentives. However, he claimed the majority of protocols offered unsustainable yields that amounted to money printing.
He continued:
“I believe that the craze will end at some point and we will see more sustainable incentives.“
Kulechov said yield farming had led to a copy and paste model for DeFi projects, ultimately creating fatigue in the nascent industry.
“Most of the liquidity mining incentives are copy-pasted from other notable projects and do not provide creative ways for communities to distribute token governance and let communities get more involved into the project.“
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