Why has the resignation of a major developer dropped dozens of tokens?

Decentralized finance, often known as DeFi, is now the most popular area of cryptocurrencies.

In large part, this is because it goes beyond the goal of crypto to remove financial intermediaries, such as banks, from the payment process. It even eliminates crypto companies, leaving nothing more than an autonomous, self-executing smart contract that allows lending and trading platforms to execute transactions without any human management.

DeFi Development Services is, according to its supporters, the ultimate goal of decentralization: transactions without the need for human intervention.

So what does it say about the state of DeFi that more than two dozen cryptocurrencies crashed last weekend, dropping as much as 70% on the news that a highly regarded developer was leaving the sector?

Maybe that Andre Cronje has too much prominence in the decentralized projects he created.

The South African developer and his regular partner Anton Nell were instrumental in a number of very important DeFi projects, most notably the highly scalable Fantom blockchain and Yearn Finance, a high-yield farming project with nearly $3 billion locked up in the protocol until last week.

Yearn's YFI token fell 7% over the weekend as word spread that Cronje had deleted his Twitter account and updated his LinkedIn profile to reflect that he was no longer a board member of the Fantom Foundation, which seeks to build support and infrastructure for the blockchain.

It plunged another 10.5% in less than an hour on Monday, following Nell's tweeted announcement that the pair "has decided it closes the chapter on contributing to the defi/crypto space."

 The Critical Individual

The decrease in price is "a response to news that reiterates how vital one individual can be to the value of a cryptocurrency," said Raj Kapoor, the founder of the India Blockchain Alliance. Many of the values have already somewhat recovered.

 Notably, not only tokens associated with projects Cronje founded, such as the new automated market maker Solidly (down 70%) or the Iron Bank lending protocol (down 50%), but many tokens unrelated to Cronje projects but built on Fantom fell by as much as 30%.

Cross-chain bridging protocol Multichain is down a third, but has been falling steadily since a code bug in January led to a $1.2 million hack (1 million of which was returned ).

Fantom Foundation CEO Michael Kong noted that the backlash was in part a result of the wording of Nell's tweet, which concluded: "There are about ~25 apps and services that we are ending on April 03, 2022."

Kong said he had to "clear up a lot of misinformation going around," "Anton, who works with André, tweeted that they were 'finishing' 25 projects. This was misunderstood. They're 'finishing' their involvement, but handing over everything they run to existing teams.

 On March 6, a top Yearn developer, known as Banteg, tweeted in frustration, "The people who bury YFI, do you realize Andre hasn't worked on it for over a year? And even if he did, there are 50 full-time people and 140 part-time collaborators to support things."

 There is also an aspect related to the number of new people coming to DeFi Development Company who are not familiar with how it works, as the decentralized part means that once launched, the projects are governed by the votes of any governance token holder. . Successful projects are often worked on by many freelance developers, who get rewarded when an update they propose is approved.

Furthermore, Cronje's decision was not unexpected. He rarely made a profit from the projects he developed, and had already left the industry in anger, citing a "toxic" and "adverse" DeFi Development community, according to an August 2020 interview on Decrypt.

Individuals like Cronje are influential, but they cease to be vital once the controlling DAO governance mechanism kicks in. But it seems that many investors do not know this.

Which raises another question: Do people understand what they're getting into when they invest in what Sen. Elizabeth Warren (D-Massachusetts) recently called "the most dangerous part of the crypto world"?