Decentralized Finance (DeFi) is being touted as the next big thing for crypto. However, no different from the last several years of Alt-mania, there is yet another loud-mouthed protocol.
(All the owners at a DeFi project deciding how to abuse the system)
Decentralized Finance is simply crypto utility tokens being utilized for running a financial system. Basically, almost every crypto out there.
Bitcoin was and is the first successful DeFi project, and there have been many since. Bitcoins function as a decentralized bank is my reasoning behind calling it DeFi, but the term also extends to industry specific projects such as the largest and loudest, the new kid in school, and the oracle of api – ChainLink (LINK).
Taking a deep dive into the blockchain, there are a considerable number of red flags involving LINK.
Looking at the above chart, we can see the most alarming factor—the amount of LINK received for free. Now many of the pre-mine/ICO cryptos have a large amount of the token minted/distributed at $0.00. However, I haven't seen any with as stark a difference as this.
The above chart means the majority of LINK is owned at a cost 0f $0.00 – $1.44. The worst part? The Devs.
They hold the better part of that 'free' LINK, and they are allowed to sell it as they please. When LINK hit a peak in 2019, the Devs started selling $600 million worth of the token for what they claimed as 'expansion purposes.' The catch is that they had already raised $32 million...
While holding all the free LINK and having a promoter network the devs created a simple, easily implemented idea that created hype to boost the coin price. The best kind of scam isn't really a scam at all. Chainlink is a legitimate company with legitimate goals and a genuine product.
Despite their being bad actors like this in the crypto space, and although they accumulate huge amounts of hype, roping in easily swayed retail investors, Gumbo has to avoid all market constituents which could be deemed 'bad actors.' From cryptos barred by larger governmental bodies, to tokens backed by 'promises and dreams' there is only a handful of crypto-assets which have real value.