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I'm pro-crypto-currency but I don't understand this, explanation follows: > A list of tokens by locked in value is full of systems that are revolutionizing fin

I'm pro-crypto-currency but I don't understand this, explanation follows: > A list of tokens by locked in value is full of systems that are revolutionizing finance: https://defipulse.com/ https://defipulse.com/ Defi protocols are providing useful services and are making money. I doubt I could overstate their enormity. The top ones are all lending and exchanges. Lending money to someone isn't revolutionary, it's been possible for centuries - and given how easy crypto is to steal and never return, I wouldn't WANT to lend it to anyone anyway! And decentralized exchanges are cool for sure, but they are self-serving in terms of only needing to exist because cryptocurrencies exist. So they can't really be used as a pro-crypto argument like you're doing because then the solution you're arguing for would only need to exist to solve a problem which it has created itself. So what is so revolutionary about these?

Slartie 5y ago
> and given how easy crypto is to steal and never return, I wouldn't WANT to lend it to anyone anyway! That's why all this "lending" is a joke anyway. They lend you less than your collateral. If you want to "borrow" 1 BTC, for example, you need to first have the value of x BTC (with x being something larger than 1) in the form of some other crypto as a collateral and lock that up somehow. So if I want to borrow 1000$, I first need to provide 1000€ and then hope the $/€ rate doesn't come too close to 1:1, because at that point my borrowing position is liquidated and I end up having paid interest for borrowing money I already had in the first place. If that sounds ridiculous, that's because it is. Lending needs trust and is thus inherently incompatible with trustless cryptocurrencies.
- tim333 5y ago
  It's more like borrowing a few k against your house to buy stuff. It has its uses.
  - Slartie 5y ago
    Its only "use" is to artificially inflate the total crypto market cap by effectively providing another source of leverage to crypto coin traders. And no, it is not at all like borrowing against your house. You can live in a house, even if you secure a loan with it. If living in your house is your primary use case for your house, which is the case for a lot of people, that's totally fine. You cannot "live" inside of your BTC. They are a token of value that is effectively useless to you if you cannot do the only thing that you can possibly do with a token of value: spend it for something else you desire to have.
CryptoPunk 5y ago
With all due respect, if you are anti-DeFi, you are not a pro-crypto person at all. I see a lot of this "I'm a pro-crypto person, but decentralizing finance is not needed" comments, and it's completely incoherent. >>Lending money to someone isn't revolutionary, it's been possible for centuries - and given how easy crypto is to steal and never return, I wouldn't WANT to lend it to anyone anyway! Loans issued via Ethereum lending protocols like Maker or Compound are fully collaterized, and default leads to automatic liquidation of the collateral to compensate the lender. It's impossible for the borrower to cheat, because an immutable smart contract enforces the terms of the loan. >>And decentralized exchanges are cool for sure, but they are self-serving in terms of only needing to exist because cryptocurrencies exist. No, any asset can be represented as an Ethereum token and traded on a DEX. Having assets worldwide use a common exchange that can never be shut down, hacked or made inaccessible, holds enormous potential for improving financial inclusivity and capital efficiency.
- eMGm4D0zgUAVXc7 5y ago
  > With all due respect, if you are anti-DeFi, you are not a pro-crypto person at all. I see a lot of this "I'm a pro-crypto person, but decentralizing finance is not needed" comments, and it's completely incoherent. I'm sorry but you misread what I said, perhaps I was not clear enough: I nowhere said or at least did not intend to say that DeFi per-se is bad. I merely don't understand what's good about the DeFi projects which the person I replied to listed. So my intention was to ask what is good about those in particular. > Loans issued via Ethereum lending protocols like Maker or Compound are fully collaterized, and default leads to automatic liquidation of the collateral to compensate the lender. It's impossible for the borrower to cheat, because an immutable smart contract enforces the terms of the loan. So what is the point of borrowing money then if you have the money already, which "fully collaterized" implies? > No, any asset can be represented as an Ethereum token and traded on a DEX. Having assets worldwide use a common exchange that can never be shut down, hacked or made inaccessible, holds enormous potential for improving financial inclusivity and capital efficiency. That is a valid point! I don't understand why a token is needed though, it's impossible to enforce its physical correlation to the asset anyway, so it would be enough to send naked ETH/BTC and use a regular decentralized forum system for setting up trades. I.e. if someone says on a forum "You send me N ETH and you get a car" that has the same validity as moving 1 car token, because nothing can enforce that the digital movement of a car token causes the physical handover of the keys. So "I owe you 1 car" only needs to be documented somewhere, e.g. as a bare textual message in an OP_RETURN or as a hash referencing a forum post, it doesn't have to be a token. So to be completely honest, I feel like the only reason the developers cramp a token into this usecase is because that allows them to issue the token, which implies they can issue a lot of it to themselves "to fund development", and once it grows in value they're rich.

Slartie 5y ago

> and given how easy crypto is to steal and never return, I wouldn't WANT to lend it to anyone anyway! That's why all this "lending" is a joke anyway. They lend you less than your collateral. If you want to "borrow" 1 BTC, for example, you need to first have the value of x BTC (with x being something larger than 1) in the form of some other crypto as a collateral and lock that up somehow. So if I want to borrow 1000$, I first need to provide 1000€ and then hope the $/€ rate doesn't come too close to 1:1, because at that point my borrowing position is liquidated and I end up having paid interest for borrowing money I already had in the first place. If that sounds ridiculous, that's because it is. Lending needs trust and is thus inherently incompatible with trustless cryptocurrencies.

tim333 5y ago
It's more like borrowing a few k against your house to buy stuff. It has its uses.
- Slartie 5y ago
  Its only "use" is to artificially inflate the total crypto market cap by effectively providing another source of leverage to crypto coin traders. And no, it is not at all like borrowing against your house. You can live in a house, even if you secure a loan with it. If living in your house is your primary use case for your house, which is the case for a lot of people, that's totally fine. You cannot "live" inside of your BTC. They are a token of value that is effectively useless to you if you cannot do the only thing that you can possibly do with a token of value: spend it for something else you desire to have.

CryptoPunk 5y ago

With all due respect, if you are anti-DeFi, you are not a pro-crypto person at all. I see a lot of this "I'm a pro-crypto person, but decentralizing finance is not needed" comments, and it's completely incoherent. >>Lending money to someone isn't revolutionary, it's been possible for centuries - and given how easy crypto is to steal and never return, I wouldn't WANT to lend it to anyone anyway! Loans issued via Ethereum lending protocols like Maker or Compound are fully collaterized, and default leads to automatic liquidation of the collateral to compensate the lender. It's impossible for the borrower to cheat, because an immutable smart contract enforces the terms of the loan. >>And decentralized exchanges are cool for sure, but they are self-serving in terms of only needing to exist because cryptocurrencies exist. No, any asset can be represented as an Ethereum token and traded on a DEX. Having assets worldwide use a common exchange that can never be shut down, hacked or made inaccessible, holds enormous potential for improving financial inclusivity and capital efficiency.

eMGm4D0zgUAVXc7 5y ago
> With all due respect, if you are anti-DeFi, you are not a pro-crypto person at all. I see a lot of this "I'm a pro-crypto person, but decentralizing finance is not needed" comments, and it's completely incoherent. I'm sorry but you misread what I said, perhaps I was not clear enough: I nowhere said or at least did not intend to say that DeFi per-se is bad. I merely don't understand what's good about the DeFi projects which the person I replied to listed. So my intention was to ask what is good about those in particular. > Loans issued via Ethereum lending protocols like Maker or Compound are fully collaterized, and default leads to automatic liquidation of the collateral to compensate the lender. It's impossible for the borrower to cheat, because an immutable smart contract enforces the terms of the loan. So what is the point of borrowing money then if you have the money already, which "fully collaterized" implies? > No, any asset can be represented as an Ethereum token and traded on a DEX. Having assets worldwide use a common exchange that can never be shut down, hacked or made inaccessible, holds enormous potential for improving financial inclusivity and capital efficiency. That is a valid point! I don't understand why a token is needed though, it's impossible to enforce its physical correlation to the asset anyway, so it would be enough to send naked ETH/BTC and use a regular decentralized forum system for setting up trades. I.e. if someone says on a forum "You send me N ETH and you get a car" that has the same validity as moving 1 car token, because nothing can enforce that the digital movement of a car token causes the physical handover of the keys. So "I owe you 1 car" only needs to be documented somewhere, e.g. as a bare textual message in an OP_RETURN or as a hash referencing a forum post, it doesn't have to be a token. So to be completely honest, I feel like the only reason the developers cramp a token into this usecase is because that allows them to issue the token, which implies they can issue a lot of it to themselves "to fund development", and once it grows in value they're rich.