Andre Cronje Says DeFi Tokens Are Not Stocks; Clarifies ‘Test in Prod’ Statement

News / 15.10.2020

DeFi continues to remind us of the good ole days of the ICO craze in 2017. But unlike ICO tokens, DeFi degens don’t need to wait for long before they can see the products in motion and ready for use.  

However, these projects come in different shapes and forms. Some deliver as promised, while others pull the rug out from under investors. And then, we have the “experiments.”

But whatever the case, for many degens, it is a game of first movers. While the earlier birds make massive profits, many are left scratching their head in losses. This has been reported too many times. 

Following the rise and fail of Liquidity Income (LBI), the project’s creator, Andre Cronje, has stepped out to defend himself while clarifying somethings in a blog post today. 

Cronje is the brainbox behind the popular Yearn Finance protocol and its governance token YFI, which is currently the most expensive cryptocurrency in the world. At one time, the token traded as high as $44,000. 

Considering YFI’s success, many investors jumped in on LBI, throwing caution to the wind despite Cronje’s warnings. Unfortunately, many suffered terrible losses, with one investor losing 940 ETH ($360K) overnight. The event stirred up criticism against the creator as investors lament about their loss.

DeFi Tokens Are Not Stocks

Cronje noted that investors are treating DeFi tokens like stocks, which shouldn’t be the case. According to him, tokens in DeFi are created as a coordination mechanism that allows holders to contribute to the community. 

System-specific tokens don’t care about prices, he said. “All they care about is that 1 = 1. It doesn’t matter if the token is being traded externally to the system at 1c or $1,” Cronje continued. 

Test in Prod

In his post, Andre Cronje described LBI as one of his experimental contracts. As such, he says he’s not responsible for losses incurred from any of his test products. 

He noted that the products he created are not for speculators but developers. “My core goal is tooling to enable other developers to easily be able to use/inherit templates I design and create products out of that,” Cronje wrote. 

Explaining this further, he clarified the meaning of “test in prod,” a popular statement he uses to describe his experiments, including the LBI project. 

“Test in prod” refers to the practice of conducting continuous tests in a live environment after an application has been deployed to production. 

Cronje said he regrets the statement, but those who have listened to some of his interviews will know it is meant to caution people about his experiments. 

“It exists to deter people from just using systems without investigation. It does NOT mean that I don’t test,” he continued.

On this note, he added that the Liquidity Income smart contract is still valid and working as it should because it is still under testing. “I am still using it to create a real-world example of how such templates function,” he added. 

Andre Cronje is also the creator of the Eminence Finance (EMN) project.  The protocol was reportedly hacked before the official launch, with $15 million of investors’ funds going down the drain. 

Mandy Williams joined the crypto space in 2016, and since then she has been learning and writing about cryptocurrencies and blockchain technology.