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In a lot of ways, crypto is just relearning the basic lessons of finance that banks and corporations learned decades ago. Things like "don't allow customers to

In a lot of ways, crypto is just relearning the basic lessons of finance that banks and corporations learned decades ago. Things like "don't allow customers to use your company's assets as collateral" and "using a bunch of leverage on volatile crypto" are much less frequent in traditional finance, specifically due to regulation or the fact that these strategies have tried and failed before. This isn't to say that decentralized finance is exactly the same as traditional finance, because it isn't. But I think the lesson here is that when you're offering products similar to traditional finance, you should assume that many of the same rules/best practices of traditional finance should apply.

binkHN 4y ago
> ...crypto is just relearning the basic lessons of finance that banks and corporations learned decades ago. To my way of thinking, they’re not relearning anything—they’re specifically using lessons learned from history as a playbook to make, well, illicit gains.
latchkey 4y ago
Everyone keeps saying regulation is the key, however in todays thread about 'not getting rich trading options' [0], all I see is people talking about how they lost money or that the game is rigged by the biggest players... and that is in one of the most regulated and well known markets on the planet. I don't see how regulation fixes anything. [0] https://news.ycombinator.com/item?id=33547658 https://news.ycombinator.com/item?id=33547658
ETH_start 4y ago
>>This isn't to say that decentralized finance is exactly the same as traditional finance, because it isn't. This has nothing to do with decentralized finance. FTX was a traditional centralized financial institution catering to crypto. The leading DeFi apps have had no problems this cycle, and that's because they're fully on-chain, with every transaction validated atomically/in-real-time to ensure its business logic integrity. DeFi's transparency and accountability is what the best CeFi firms strive for. The big risk with DeFi is the possibility of a smart contract vulnerability, but this diminishes over time as these apps have their source code reviewed by more people and go through more real world battle-testing.

binkHN 4y ago

> ...crypto is just relearning the basic lessons of finance that banks and corporations learned decades ago. To my way of thinking, they’re not relearning anything—they’re specifically using lessons learned from history as a playbook to make, well, illicit gains.

latchkey 4y ago

Everyone keeps saying regulation is the key, however in todays thread about 'not getting rich trading options' [0], all I see is people talking about how they lost money or that the game is rigged by the biggest players... and that is in one of the most regulated and well known markets on the planet. I don't see how regulation fixes anything. [0] https://news.ycombinator.com/item?id=33547658 https://news.ycombinator.com/item?id=33547658

ETH_start 4y ago

>>This isn't to say that decentralized finance is exactly the same as traditional finance, because it isn't. This has nothing to do with decentralized finance. FTX was a traditional centralized financial institution catering to crypto. The leading DeFi apps have had no problems this cycle, and that's because they're fully on-chain, with every transaction validated atomically/in-real-time to ensure its business logic integrity. DeFi's transparency and accountability is what the best CeFi firms strive for. The big risk with DeFi is the possibility of a smart contract vulnerability, but this diminishes over time as these apps have their source code reviewed by more people and go through more real world battle-testing.