[seibelj]

Decentralized Finance (DeFi) is the green shoots of a new and innovative financial system. It will break, it will be hacked, but longterm I believe this is the direction of finance - borderless, global, instant, peer to peer. Artificial barriers / borders / regulations simply don't matter when the mechanism for such transfers and investment are unstoppable and permission-less.

Look at Compound Finance - $2 billion+ in assets deposited and over $1 billion borrowed https://compound.finance/markets

This can't be stopped - and there is no government regulating it!

[robjan]

The problem with Compound is that lenders and borrowers are rewarded with a utility token which is more valuable than the interest on the loans. This creates the opportunity where you can lend money and borrow money collateralised against that loan over and over again.

[jcfrei]

I am also optimistic about the long-term value created by DeFi and the new business models it will allow. But for now I think the sole reason it exists is because people use it to get leverage for speculation.

[seibelj]

A lot of modern finance fulfills that need. Give it time, and it will also be used for productive capital formation in a bigger way.