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by lxgr
1750 days ago
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Thanks for a very nuanced reply! > Regulatory capture, paid-for ratings, revolving door appointments between finance companies and government This is a very valid concern to have about traditional finance. I'm just not convinced that the same structures won't emerge in DeFi sooner rather than later, and that in the regulatory vacuum in between a lot of retail investors will be left holding bags. |
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Uniswap's dropping of a number of coins / tokens fairly recently proved that a decentralised exchange that supposedly had decentralised governance could still be controlled by a central entity.
DeFi is so young, however, that there just hasn't been the time to run through enough scenarios to see how well, or poorly, it works.
It doesn't help that there have been so many rug-pulls and scams because so many people are blinded by dollar signs they can't see an elephant sized flashing neon sign saying "we will steal whatever isn't nailed down". This is what needs regulation, somehow...
Regulating against greed and / or stupidity is one of those eternal problems: If humans could do it, they wouldn't need to.
The conundrum of DeFi is the lack of a centralised entity to either have a trustworthy reputation or take to court. Uniswap being a counter-example.
My approach is to move slowly and diversify to minimise risk.
Re-reading what I just wrote, I think I just repeated your last paragraph in a whole lot more words.