V God cautions: Do not underestimate DeFi intelligent contract risk
Rhythblockbeats - In a recent interview to mark the fifth anniversary of Ethereum, V God warned DeFi users not to underestimate the risks of DeFi smart contracts.
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According to Vshen, DeFi's interest rates are several times higher than those of traditional Banks, which means that DeFi's risk and risk of collapse are much higher than those of traditional Banks, and even if the trading platforms and protocols are audited, there is no guarantee that they will be safe. So while DeFi can be highly profitable, users should not put all their savings into it.
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DeFi saw a number of high-profile smart contract vulnerability attacks in 2020, such as the bZx flash loan vulnerability in February that led to nearly $1 million worth of cryptocurrency losses, and the Bancor smart contract vulnerability in June that led to the network shutdown.
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According to Rhythm, V God also expressed concern about the unsustainability of the mobile mining. He argues that the high interest incentives paid by the liquidity-mining agreements are essentially loans, and that platforms will not be issuing money all the time to entice people to permanently join their ecosystems. The high interest rate incentive will only exist for a short time, and when the temptation is low, the yield may fall back to very close to zero.
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