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Regulations in DeFi would do nothing but turning it into traditional, permissioned finance but on blockchain. Nobody wants that.

pjc50 5y ago
Nobody wants to lose all their money because the frontend got hacked, and yet here we are.
- throwaway248329 5y ago
  Nobody forces you to put your money in DeFi protocols.
  - MauranKilom 5y ago
    That's a non-argument. Nobody forces me to buy baby milk. Yet it makes perfect sense for the FDA to regulate what is allowed to be in baby milk.
    - throwaway248329 5y ago
      Baby milk is a disingenuous analogy since it's not expected to be consumed by the buyer. If consenting adults voluntarily went out of their way to get an unregulated product, without harming anyone but themselves, then why should they be stopped?
      - Kbelicius 5y ago
        > Baby milk is a disingenuous analogy since it's not expected to be consumed by the buyer. This is a disingenuous argument. FDA doesn't regulate only stuff that is not expected to be consumed by the buyer. GP could have said wine instead of baby milk.
        throwaway248329 5y ago
        And yet they chose baby milk, not wine. Why? Because not everyone would agree that governments should necessarily regulate everything that you consume. Especially when it's advertised as "consume at your own risk".
        root_axis 5y ago
        > Especially when it's advertised as "consume at your own risk". Yet alcohol is highly regulated, much more so than baby milk.
        throwaway248329 5y ago
        But does it make "perfect sense" to regulate it? No. Especially not when there is a large group of population who disagrees to those regulations.
        root_axis 5y ago
        There is always large opposition to regulations of any kind petty much by definition.
        throwaway248329 5y ago
        "There is always large opposition to restrictions of freedom".
        root_axis 5y ago
        That's a very poor rhetorical tactic since that sentiment could be applied to literally any law, since all laws restrict freedom.
        throwaway248329 5y ago
        Not every law is a restriction of freedom. My freedom ends where yours begins. Sadly, some people are more than happy to force their worldview on others, "for their own sake".
gjulianm 5y ago
I think that's the point. Regulations on finance are, in part, to avoid attacks, scams, misunderstandings... Blockchains only offer some security in a part of the transaction, but they do nothing for the "real world" part. If you want serious finance that people can rely on you'll end up looking like traditional, permissioned finance but on blockchain.
- Nextgrid 5y ago
  If you have regulations you'll realize that they're mostly sufficient to secure transactions as well, at which point the blockchain becomes unnecessary as well.
  - eterm 5y ago
    Not just secure them, but regulations and laws allow or require them to be overturned and reversed. At which point the blockchain becomes a hiderance.
legutierr 5y ago
Not true! A lot of code written for financial applications, and a lot of the complexity in those systems, is there just to synchronize, reconcile and settle between the independent data silos maintained by the various entities involved in a transaction. Blockchains can do a lot to eliminate that complexity. Also, there are interesting advantages to the transaction authorization model that blockchains have whereby a message is valid only if signed by the sender, enforced down to the data layer.
- throwaway248329 5y ago
  Traditional finance did settling just fine before. The only reason they are getting into blockchain now, is that it's a real alternative that people prefer to the banks.
  - legutierr 5y ago
    Just because they did it just fine before, doesn't mean that there isn't a better way that will provide massive competitive advantages to companies that adopt them. Big companies ran payroll 100 years ago without IBM machines, but IBM made it easier for big companies to run payroll, so companies that bought IBM machines were able to scale. Company budgets were done just fine on big sheets of paper 50 years ago before PCs loaded with VisiCalc or Excel deployed to every desktop. What company that still did it the old way survived the 1980s? Credit card transactions even 30 years ago were still often done with a physical mechanical impression at the point-of-sale. That worked just fine, didn't it? Yeah, there was some fraud, but the people who were given credit cards were few enough that it wasn't unmanageable. But online POS systems now mean that almost everyone today makes payments with debit or credit cards most of the time. Is "things are working just fine" a reason to not innovate?

pjc50 5y ago

Nobody wants to lose all their money because the frontend got hacked, and yet here we are.

throwaway248329 5y ago
Nobody forces you to put your money in DeFi protocols.
- MauranKilom 5y ago
  That's a non-argument. Nobody forces me to buy baby milk. Yet it makes perfect sense for the FDA to regulate what is allowed to be in baby milk.
  - throwaway248329 5y ago
    Baby milk is a disingenuous analogy since it's not expected to be consumed by the buyer. If consenting adults voluntarily went out of their way to get an unregulated product, without harming anyone but themselves, then why should they be stopped?
    - Kbelicius 5y ago
      > Baby milk is a disingenuous analogy since it's not expected to be consumed by the buyer. This is a disingenuous argument. FDA doesn't regulate only stuff that is not expected to be consumed by the buyer. GP could have said wine instead of baby milk.
      - throwaway248329 5y ago
        And yet they chose baby milk, not wine. Why? Because not everyone would agree that governments should necessarily regulate everything that you consume. Especially when it's advertised as "consume at your own risk".
        root_axis 5y ago
        > Especially when it's advertised as "consume at your own risk". Yet alcohol is highly regulated, much more so than baby milk.
        throwaway248329 5y ago
        But does it make "perfect sense" to regulate it? No. Especially not when there is a large group of population who disagrees to those regulations.
        root_axis 5y ago
        There is always large opposition to regulations of any kind petty much by definition.
        throwaway248329 5y ago
        "There is always large opposition to restrictions of freedom".
        root_axis 5y ago
        That's a very poor rhetorical tactic since that sentiment could be applied to literally any law, since all laws restrict freedom.
        throwaway248329 5y ago
        Not every law is a restriction of freedom. My freedom ends where yours begins. Sadly, some people are more than happy to force their worldview on others, "for their own sake".

gjulianm 5y ago

I think that's the point. Regulations on finance are, in part, to avoid attacks, scams, misunderstandings... Blockchains only offer some security in a part of the transaction, but they do nothing for the "real world" part. If you want serious finance that people can rely on you'll end up looking like traditional, permissioned finance but on blockchain.

Nextgrid 5y ago
If you have regulations you'll realize that they're mostly sufficient to secure transactions as well, at which point the blockchain becomes unnecessary as well.
- eterm 5y ago
  Not just secure them, but regulations and laws allow or require them to be overturned and reversed. At which point the blockchain becomes a hiderance.

legutierr 5y ago

Not true! A lot of code written for financial applications, and a lot of the complexity in those systems, is there just to synchronize, reconcile and settle between the independent data silos maintained by the various entities involved in a transaction. Blockchains can do a lot to eliminate that complexity. Also, there are interesting advantages to the transaction authorization model that blockchains have whereby a message is valid only if signed by the sender, enforced down to the data layer.

throwaway248329 5y ago
Traditional finance did settling just fine before. The only reason they are getting into blockchain now, is that it's a real alternative that people prefer to the banks.
- legutierr 5y ago
  Just because they did it just fine before, doesn't mean that there isn't a better way that will provide massive competitive advantages to companies that adopt them. Big companies ran payroll 100 years ago without IBM machines, but IBM made it easier for big companies to run payroll, so companies that bought IBM machines were able to scale. Company budgets were done just fine on big sheets of paper 50 years ago before PCs loaded with VisiCalc or Excel deployed to every desktop. What company that still did it the old way survived the 1980s? Credit card transactions even 30 years ago were still often done with a physical mechanical impression at the point-of-sale. That worked just fine, didn't it? Yeah, there was some fraud, but the people who were given credit cards were few enough that it wasn't unmanageable. But online POS systems now mean that almost everyone today makes payments with debit or credit cards most of the time. Is "things are working just fine" a reason to not innovate?