DeFi in Turmoil as Eye-Popping Yields Prove Too Good to Be True
- ‘Serious repercussions’ expected as Celsius halts withdrawals
- This is ‘not a normal market anymore,’ Arca’s Dorman writes
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The notion that the cryptocurrency industry has near-magical powers to pay out yields that dwarf those found in the traditional financial world without much added risk is undergoing a rapid and painful reality check.
Barely a month after the dramatic collapse of the Terra blockchain, whose Anchor protocol enticed investors with annual yields of almost 20%, crypto lender Celsius Networks halted withdrawals and some other transactions on its platform offering similarly eye-popping returns. Those active in the space insist that these are just growing pains for a young industry rather than glaring flaws that reveal profound existential issues, yet the episodes still have the power to shake up the ever-changing world of crypto finance.