Ethereum's launch in 2015 was a pivotal moment in finance, as it enabled developers to create decentralized applications using smart contracts, paving the way for DeFi.
Uniswap's AMM model, while innovative, poses a significant risk to DeFi's sustainability due to its inability to generate profits for liquidity providers.
The profitability issue for liquidity providers is crucial; if they continue to lose money, they may withdraw from DeFi protocols, sparking broader instability in the crypto industry.
If liquidity providers start moving their funds to more traditional investments due to consistent losses, it could have ripple effects that threaten the entire DeFi ecosystem.
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