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by tbrownaw
1344 days ago
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> What the average Joe need to know is that DeFi, while capable of producing huge gains, also comes with a lot of risk both market-wise and protocol safety-wise. Gains have to come from somewhere. If they're not backed by something in the real world - say capital investment making some process more efficient or whatever - then the alternatives are that they're illusionary or backed by shenanigans. |
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Yes. Key concept. There were people in the crypto space who believed they'd invented financial perpetual motion. If you could run money through enough different transactions, you'd get a net gain without doing anything in the real world. That mostly went away when the entire crypto sector crashed. The "Line goes up" video[1] covers this mindset.
[1] https://www.youtube.com/watch?v=YQ_xWvX1n9g