Bitcoin Knowledgeable Andreas Antonopoulos Acknowledges that Ethereum based mostly DeFi Protocols can be utilized to Earn Passive Revenue
Bitcoin and distributed techniques professional Andreas Antonopoulos not too long ago acknowledged that decentralized finance (DeFi) platforms enable customers to earn passively through the use of their cryptocurrency holdings.
Antonopoulos, who primarily helps developments associated to the Bitcoin (BTC) protocol, argued that DeFi is likely one of the few methods to earn a passive revenue with out having to “give your cash to different individuals.”
Antonopoulos, who has authored many best-selling books together with Mastering Ethereum, stated that Bitcoin holders could retain custody of their cash whereas incomes passively by way of so-called DeFi platforms.
Antonopoulos, whose feedback got here throughout a current livestream Q&A uploaded to his YouTube channel (on June 27, 2020), identified that Bitcoin buyers might convert their holdings into Ethereum (ETH) or stablecoin like Dai (DAI). These funds might then be loaned out on a DeFi platform, the place they’d be capable to earn curiosity on their loans.
However Antonopoulos additionally cautioned that conducting a majority of these trades on Ethereum-powered DeFi networks was fairly dangerous. This, as there are critical points which have been present in good contracts (of their supply code), which has led to quite a few hacks.
“Ethereum could have issues. It might have bugs. The consensus algorithm could have failures. You could have will increase within the fuel value, which results in different cascade issues. And all of these issues could cause you to lose some or your entire invested capital.”
Borrowing and lending crypto-assets can also be dangerous as a result of their costs are extremely risky. Many digital currency-backed loans are additionally used for margin buying and selling, which makes them even riskier. The quantity of a majority of these loans crossed $eight billion in 2019, they usually might entice much more buyers sooner or later.
Antonopoulos identified that there are lots of people who find themselves holding Bitcoin on a long-term foundation (referred to as “HODLers”). Nonetheless, he famous that there’s no assure that BTC value will rise. He stated that “what goes up, can come down.”
He additionally talked about:
“You possibly can pull your Bitcoin out and convert it, purchase 1,000 altcoins (various cash), after which watch them crash by 98%.”
This really occurred to many speculative buyers in the course of the preliminary coin providing (ICO) craze of late 2017 and early 2018. Not solely did altcoin costs crash by over 99% in lots of circumstances, most of them had been additionally scams.
Jason Calacanis, a well known angel investor who has been concerned with Uber and Robinhood, not too long ago famous by way of Twitter that 99% of altcoins are “rubbish” which were issued by unqualified entities.
Nonetheless, Calcancis (like many others) has argued that there’s nonetheless hope for perhaps 1% of altcoin tasks, which he claims might change the world.
“Traditionally, 99% of crypto tasks are rubbish run by unqualified [people,] delusional however beneath common founders or grifters… the 1% that aren’t, might change the world. I’m ready for that 1% to ship their product so I can discuss to their clients. You bought clients?”