KEY POINTS

  • Jackson Palmer is the co-creator of Dogecoin
  • He describes the crypto market as a house of cards
  • DOGE was trading up 6.12% at $0.06169

Australian software engineer Jason Palmer, the co-creator of Dogecoin, has blamed DeFi for the cryptocurrency crash. One of the harshest critics of the industry, Palmer described crypto as a "house of cards."

Palmer shared his views with the host of the Australian TV program "The Project" after being invited to the show as a guest. He added that the crypto downturn is not yet "the end" but could be because people have started to realize the "systemic risks" of the industry.

"If you think of [Crypto] as a house of cards, some of the cards at the bottom of that have started to crumble," Palmer explained. The Australian software engineer also laid the blame on decentralized finance ( DeFi ) and its high-interest lending for crypto's recent crash.

Illustration shows representations of cryptocurrency Dogecoin Representations of cryptocurrency Dogecoin are seen in this illustration taken June 16, 2022. Photo: Reuters / DADO RUVIC

DeFi firms that act as digital banks and gamble users' funds to offer attractive interest rates, according to Palmer, are to be blamed for the tragic crash. "Obviously, when you are doing that, all it takes is one of those things that you [are] making a bet on to crash, and then it sets off the whole kind of chain reaction."

The Dogecoin co-creator said regulating crypto would just destroy its concept and value proposition since it is quite easy to do the same with electronic banking, adding that "there are some people who see cryptocurrency as becoming just a more convenient way of doing traditional finance."

Palmer does not see a particular use case for crypto even if its cumulative value almost hit $3 trillion in November 2021. For the DOGE co-creator, the crypto crash is nothing but a wake-up call to average investors, describing the industry as not different from playing at a roulette table.

Interestingly, Palmer noted that while there is a bloodbath in the crypto market and other crypto firms and assets started crumbling, it is too early to say that it is the end of cryptocurrency.

DOGE was trading up 6.12 percent at $0.06169 with a 24-hour volume of $521,690,053 as of 3:21 a.m. ET on Tuesday based on the latest data from CoinMarketCap.