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The market has fallen sharply in the past few days. Bitcoin once fell to $10,000. As of the time of writing, the price of Bitcoin was $10,578, and the price of Ethereum was $390. In this round of market conditions, the various DeFi categories are infinite. The tokens fell beyond recognition, and this situation once again made many investors panic.
It happened to be 94 yesterday, so many people associate the crash as whether there is some kind of force deliberately doing evil behind their backs. One of the widely circulated claims is said to come from Bao Erye.
He believes that the rise of this round of DeFi will destroy the life of traditional centralized exchanges, and traditional centralized exchanges will never wait to die, and will definitely find ways to fight back. So what are the methods for centralized exchanges to counterattack? There are mainly the following:
First, restrict everyone from withdrawing coins or not allowing everyone to withdraw so quickly.
Second, learn DEX and create your own various mining methods to attract players.
Third, short Ethereum. As long as the foundation of Ethereum is drained, many projects will collapse in an instant.
Let's not talk about whether this round of plunge is caused by the black hands of the exchange, but these points are reasonable.
Let me analyze with you the logic behind these three points:
Let's look at the first point first: restrict withdrawals. The current centralized exchanges actually accumulate a large number of users' digital currencies, and the exchanges can use these assets to carry out various businesses to earn money, such as borrowing and short selling. If all users withdraw coins and the exchange has no deposit funds, these money-making channels will be gone, which is equivalent to drawing a salary from the bottom of the exchange. I believe that under extraordinary circumstances, this is indeed possible.
The second point: The exchange mines by itself. At present, various DeFi projects have robbed the traffic of centralized exchanges by mining. These gameplays have been very mature and the technology has been tested by the market. Therefore, centralized exchanges can use their original advantages to launch their own mining. project.
Binance is already doing it. Binance recently launched its own market maker project Liquid Swap. I believe that next major exchanges will scramble to grab this piece of cake and deploy mining.
With regard to these three points shorting Ethereum, it is necessary to analyze it a little bit with you.
At present, many asset synthesis projects such as SNX will mortgage Ethereum and derive various new types of assets, and many mortgage projects such as MakerDAO will also mortgage Ethereum to generate assets (such as DAI). When the price of Ethereum plummets, the mortgager must cover his position to keep his mortgaged Ethereum. Otherwise, his mortgaged Ethereum will be auctioned, which will cause a stampede and collapse, affecting almost all DeFi assets. And tokens.
Therefore, shorting Ethereum is undoubtedly a draw for the whole DeFi.
I think these three points are very reasonable, but not every point will be used by exchanges to attack DeFi? I don't think it is necessary, but it is a good reminder for every investor: We must actively deal with the potential risks and opportunities that these three points may bring to us.
Specifically, I think there are two aspects to pay attention to:
The first is not to put too many assets, especially important assets such as Bitcoin and Ethereum, in the exchange, and try to mention them in your wallet.
The second is that if the price of Ethereum plummets and falls below US$400, for example, at the moment, we don't need to worry about whether it is because of shorting, but to seize this opportunity to restart fixed investment. We must pay attention to long-term value. The price of Ethereum is very low within 400 US dollars. We must seize the opportunity to accumulate Ethereum chips.
So what should we think of this market crash? In my opinion, this is a very healthy callback. This callback may continue for a while, and even the prices of various tokens will fall further, but this is to accumulate strength for the next step and continue to rise, so it is an ordinary investment. We don’t have to panic at all, instead, we can take this opportunity to buy in the market the coins that we have always been optimistic about but have not bought in the past because of the high prices.
