“It’s all very nascent technology,” Levert said, adding that he’ll be back when the market stabilizes.
Trouble for crypto lenders is one more illustration of how the entire ecosystem that’s sprung up around cryptocurrencies is being put to the test. Yields have dwindled in every corner of the market, from well-known coins to obscure ones. The value of crypto assets tied up in various decentralized platforms has dropped 60% since January, to about $39 billion, according to DeFiPulse, a crypto analytics site.
Yield farming, and crypto lending in general, has been been criticized by some big names in the field. In an interview with Bloomberg News in April, crypto billionaire Sam Bankman-Fried described the complicated mechanism of yield farming and likened it to a Ponzi scheme. The recent troubles at crypto lenders including Celsius and Babel Ltd., as well as news of job cuts at exchange Coinbase Global Inc., have only added to the anxiety.
Amid the storm, many have lost money.
Nhat Nguyen, who lives in New York, started lending a coin called Avalanche about eight months ago, just before crypto plummeted, and has now lost about $2,000. The 33-year-old, who has masters degrees from the Massachusetts Institute of Technology and Harvard’s Kennedy School, recently left the traditional finance world — past jobs include roles at JPMorgan and Goldman Sachs — to work for a crypto company.
Despite the losses and the ongoing risks, she's still trying to earn interest from some stablecoins.
"Lots of projects are probably going to go out of business, but others will keep building and providing," Nguyen said. "I have faith in it, I don't think this is the end of crypto."
This article was provided by Bloomberg News.