The software developer and entrepreneur forecasted that many projects in the DeFi sector wouldn't last the next five to ten years
In a recent YouTube session, Cardano founder Charles Hoskinson shared his outlook on the future of decentralised finance. Hoskinson, who has seemingly vowed to redefine the sector, predicted that many active DeFi projects would fall off the grid within the next five to ten years.
He cited the lack of long-term vision and rigorous engineering as the factor that will drive the majority of these projects to the ground. Hoskinson averred that the industry is flooded with many projects run by the 'hope and prayer' mindset, which he emphasised isn't enough to keep them afloat. ‘
"It's very hard to do this kind of engineering and to do it right, with an eye and foresight for the future. Unfortunately, many of the projects in this space will not stand the test of time. We will see a great extinction occur in the next five to 10 years, the reason you do things right, is so that you can be around for that extinction event," he said.
Poor quality of applications denting the reputation of the ecosystem
Hoskinson opined that many of the current projects are of 'low quality,' highlighting this as the reason for the dissatisfaction within the DeFi community.
"Many of you are tired of the incredible cost, the lack of clarity, and the low production quality of applications in the DeFi space," the Input-Output boss told his viewers.
Justifying his take, the Cardano boss noted that the DeFi sector had witnessed a series of hacks, most of them resulting in huge financial losses. Hoskinson particularly tagged the Ethereum space for having loopholes that were exploited, leading to losses to the tune of $10 billion this year alone.
Survival for the fittest
The Cardano chief also observed the DeFi space had become an environment where only the projects that come out at the top survive. During the 28-minute session titled 'DApps and Cardano DeFi Alliance,' Hoskinson described Cardano as a project looking to address the existing frailties.
He added that Cardano's DeFi platform is prioritising aspects such as public-private partnership and certification standards to make it more relevant and secure. Hoskinson argued that the entire industry could benefit from certification standards as they would be the basis for determining the value of DeFi projects.
More developments in the pipeline
The technology entrepreneur projected 2022 to be a great year for Cardano as the network will see even more significant developments. He went on to unveil a joint venture dubbed the Cardano DeFi Alliance consisting of various developers working to advance the blockchain. The objective of the alliance, he explained, would be to build a 'robust and dynamic' ecosystem that will serve as the pacesetter in the DeFi industry.