[satellites]

That’s a blatant straw man fallacy. No one here is insinuating that financial institutions are pure and innocent.

If anything, crypto news over the past year has proven one thing: that the crypto space is just as corrupt as “traditional finance,” but with none of the guardrails that make it harder to commit blatant scams.

Society developed immune responses to financial fraud in the form of regulations. They are insufficient and evil people still take advantage of loopholes in the system. However, crypto right now is a living example of how much worse it could be.

[timdaub]

The difference between traditional finance and DeFi is that DeFi is so transparent that a single person (Molly) can run a blog to aggregate all things that went wrong. They can arise at a single number of error that the industry has created. This is an achievement of radical transparency; something that should be celebrated.

[pwinnski]

She states that the "single number" is a "very conservative" estimate, in part because it's very difficult to track some of the "radically transparent" obfuscation in the cryptocurrency world.

In addition, being able to state that X worth of cryptocurrency disappeared into a tumbler or mixer isn't particularly transparent, either.

[lern_too_spel]

The difference between DeFi and traditional finance is that traditional finance is actually useful, while DeFi has absolutely no societal value. https://news.ycombinator.com/item?id=34210334

If society deems that level of transparency beneficial, it can be implemented on centralized databases much more cheaply.

[AlexandrB]

Wake me up when we get some transparency on what's backing all those Tethers or whether Binance is solvent or not. It's one thing to document scams after the fact, it's another to have mechanisms to identify them before they grow out of hand.

[gizmo385]

DeFi is orders of magnitude smaller, which makes aggregation much simpler.

[notahacker]

Not to mention that traditional finance helps billions of people and businesses buy their houses, spread out payments, invest in their futures, see their business through growth/lean periods etc. There are real world success stories - too many to aggregate even within people's own social circles.

On the other hand, if there are people using DeFi's ability to take out very short term overcollateralised loans at above tradfi rates to finance anything other than speculation on crypto, they're being very quiet about it...