With the ongoing DeFi boom, Charles Hoskinson — Cardano creator and CEO of IOHK — has revealed in a recent video the firm’s plans to foray into the world of DeFi.
Speaking during an AMA session on YouTube, Hoskinson admitted that he has become “very obsessed” with decentralized finance in recent days, and this has seen him participating in several discussions and interviews as well as writing a number of reports on the subject to ensure they are well-equipped.
He went on to note that IOHK has been seriously conducting research on some of the most popular things on DeFi while still trying not to divulge any information yet until their DeFi project is ready.
What’s in the open for now is IOHK’s partnership with Emrugo to develop an algorithmic stablecoin. According to Hoskinson, this could be “significantly better” than DeFi’s oldest project, MakerDAO.
“[…] We’ve partnered with Emrugo, and we’re right now working on the logistics of a stable coin with them that we’re going to be building first on ergo to verify everything works correctly, and then we’ll pull it over into Cardano and this is going to be an algorithmic stablecoin.
We think it’ll be significantly better than MakerDAO. That’s just one of many DeFi things that are going on right now”
Cardano Will Have A Lot More Success Than The First-Movers In The DeFi Space: Hoskinson
Skeptics would argue that Cardano is already too late to the DeFi party given the industry already has over $9 billion in assets locked in various DeFi protocols. The DeFi craze has been sparked by yield farming which has taken the crypto community by storm in the past couple of weeks. The yield farming frenzy has, however, reignited concerns about ethereum’s scalability as the gas fees go through the roof.
Nonetheless, Hoskinson sees Cardano’s late advancement into the DeFi sector as more of an advantage than a hurdle. In fact, he believes it is better to be the second-mover and not the first-mover when it comes to DeFi.
“The reality is that the first-mover advantage is actually a disadvantage. Those network effects were ephemeral and often covered with mistakes and scars and explosions. You actually want to be in the imitator, the second-mover category for DeFi.”
As such, Cardano will have “a lot, lot more luck than the first-movers did in the space,” Hoskinson opined, adding that Cardano is just better suited as a platform than its predecessors. And although there will be a lot of heated competition in the burgeoning DeFi sector especially next year, Hoskinson is determined to win.
Notably, Cardano finally launched the much-hyped but much-delayed Shelley upgrade on July 29 after five cool years of development. The upgrade introduced staking rewards for all ADA holders. It remains to be seen whether Cardano’s move into DeFi will be a success just like Shelley. Patience is certainly the name of the game for the eleventh-largest blockchain.