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> If you take away all the buzzwords you’ll notice that the core utility of uniswap is the “decentralization” of services which are offered by the traditional f

> If you take away all the buzzwords you’ll notice that the core utility of uniswap is the “decentralization” of services which are offered by the traditional finance system. If I contact my bank, will they allow me to become a liquidity provider for USD-EUR pair and give me a cut of USD-EUR exchanges that they make? If not, which traditional financial institution do I have to contact for this? Actually, I would be ok if you could point me to a bank that provides positive yield (or at least nonnegative yield) if I deposit my money there. Is there a traditional financial institution that can provide me with some sort of working "savings" solution... If there is, please let me know, because I'm looking for one. The way I see it, entities like Uniswap/AAVE/etc. are surely emulating aspects of the traditional finance system, but are not exactly redundant. Perhaps if banks start offering positive interest rates on deposits (not even above inflation... just positive), I'll change my mind.

rank0 5y ago
Yes you can provide liquidity for eur-usd if you jump through all the hoops. A quick google search will show you that lots of savings accounts have positive yields. Rates have been low cause of fed action but banks have provided positive returns in savings accounts since like forever ago.
- DennisP 5y ago
  Seems like a lot of blockchain critiques involve some variant of "you can already do that if you jump through all the hoops," without recognizing that it's worthwhile to remove the hoops.
  - rank0 5y ago
    It certainly might be worthwhile to remove the hoops! The original discussion was whether or not defi protocols enable new financial services. I argue they do not, but instead attempt to automate/decentralize those services.
    - DennisP 5y ago
      That seems like a quibble over definitions. I'm not aware of traditional finance offering exchanges without order books, I think Uniswap is new in doing that. But it is still an exchange. Speaking broadly, finance involves trades and loans and bets on future prices, and pretty much anything defi does will fit into those categories, even if it does it in a different way; anything that doesn't fit in those categories won't be called "finance."
- dkshdkjshdk 5y ago
  > Yes you can provide liquidity for eur-usd if you jump through all the hoops. The emphasized part is important. Most people either can't or don't know how to jump through these hoops. Is it even worth it to jump through these hoops, when I only have 100 USD to "invest"? Entities like Uniswap make the process much easier and widely-accessible, which makes a big difference (particularly if you live outside the developed world). Furthermore, you did not respond to what I asked: which institution do I need to contact for this? My bank? > A quick google search will show you that lots of savings accounts have positive yields. Rates have been low cause of fed action but banks have provided positive returns in savings accounts since like forever ago. This comment is rather US-centric. My experience where I am right now (outside of the US) is that interest rates currently are either negative (yes, you have to pay money to the bank to park your money there; example: [0]) or basically zero (an interest rate of 0.01% might not even cover the "maintenance fees" of your account, let alone losses due to inflation, particularly if you are not rich... might as well just stash the cash under my mattress and keep the maintenance fees to myself). So, yeah... this is what entities like Uniswap provide that traditional financial institutions don't. Among other things: * Capacity to borrow, lend, buy and sell "crypto-assets" or whatever you want to call them (most traditional financial institutions will not touch them with a 10-feet pole, for obvious reasons); * Capacity to do those things with minimum friction/overhead, from anywhere in the world, at any time (no KYC, no gatekeepers); * Exchange and interest rates that are actually decided by the market, rather than centrally planned (by your bank and central banks), which leads to reasonable interest rates for borrowing/lending (i.e. positive rates). Of course, you can argue that some of these "features" are "anti-features" (e.g. no KYC = no friction, but it also means that perhaps money laundering could take advantage of it). Either way, it seems clear to me that Uniswap et al. enable you to do things that you (or, at least, "most people") simply cannot do within the traditional financial system; you may not see too much value in these things, and even be generally suspect of "cryptocurrencies", but it seems complicated to argue that Uniswap does not bring anything new to the table. The proof is in the pudding... if Uniswap was not useful (beyond what traditional financial institutions already provide), you wouldn't see so many people flocking to it. [0] https://www.nationalbanken.dk/en/marketinfo/official_interestrates/Pages/default.aspx https://www.nationalbanken.dk/en/marketinfo/official_interes...
  - 5y ago

rank0 5y ago

Yes you can provide liquidity for eur-usd if you jump through all the hoops. A quick google search will show you that lots of savings accounts have positive yields. Rates have been low cause of fed action but banks have provided positive returns in savings accounts since like forever ago.

DennisP 5y ago
Seems like a lot of blockchain critiques involve some variant of "you can already do that if you jump through all the hoops," without recognizing that it's worthwhile to remove the hoops.
- rank0 5y ago
  It certainly might be worthwhile to remove the hoops! The original discussion was whether or not defi protocols enable new financial services. I argue they do not, but instead attempt to automate/decentralize those services.
  - DennisP 5y ago
    That seems like a quibble over definitions. I'm not aware of traditional finance offering exchanges without order books, I think Uniswap is new in doing that. But it is still an exchange. Speaking broadly, finance involves trades and loans and bets on future prices, and pretty much anything defi does will fit into those categories, even if it does it in a different way; anything that doesn't fit in those categories won't be called "finance."
dkshdkjshdk 5y ago
> Yes you can provide liquidity for eur-usd if you jump through all the hoops. The emphasized part is important. Most people either can't or don't know how to jump through these hoops. Is it even worth it to jump through these hoops, when I only have 100 USD to "invest"? Entities like Uniswap make the process much easier and widely-accessible, which makes a big difference (particularly if you live outside the developed world). Furthermore, you did not respond to what I asked: which institution do I need to contact for this? My bank? > A quick google search will show you that lots of savings accounts have positive yields. Rates have been low cause of fed action but banks have provided positive returns in savings accounts since like forever ago. This comment is rather US-centric. My experience where I am right now (outside of the US) is that interest rates currently are either negative (yes, you have to pay money to the bank to park your money there; example: [0]) or basically zero (an interest rate of 0.01% might not even cover the "maintenance fees" of your account, let alone losses due to inflation, particularly if you are not rich... might as well just stash the cash under my mattress and keep the maintenance fees to myself). So, yeah... this is what entities like Uniswap provide that traditional financial institutions don't. Among other things: * Capacity to borrow, lend, buy and sell "crypto-assets" or whatever you want to call them (most traditional financial institutions will not touch them with a 10-feet pole, for obvious reasons); * Capacity to do those things with minimum friction/overhead, from anywhere in the world, at any time (no KYC, no gatekeepers); * Exchange and interest rates that are actually decided by the market, rather than centrally planned (by your bank and central banks), which leads to reasonable interest rates for borrowing/lending (i.e. positive rates). Of course, you can argue that some of these "features" are "anti-features" (e.g. no KYC = no friction, but it also means that perhaps money laundering could take advantage of it). Either way, it seems clear to me that Uniswap et al. enable you to do things that you (or, at least, "most people") simply cannot do within the traditional financial system; you may not see too much value in these things, and even be generally suspect of "cryptocurrencies", but it seems complicated to argue that Uniswap does not bring anything new to the table. The proof is in the pudding... if Uniswap was not useful (beyond what traditional financial institutions already provide), you wouldn't see so many people flocking to it. [0] https://www.nationalbanken.dk/en/marketinfo/official_interestrates/Pages/default.aspx https://www.nationalbanken.dk/en/marketinfo/official_interes...
- 5y ago