Bitcoin Forum

As with all the fads in the industry, sadly I think we put too much faith in the prospects of decentralized finance. Don't get me wrong, I think it's promising, but will it be the thing that takes blockchain, bitcoin, ethereum, or even stablecoins into the next economic era?

Ehh. Though I'm not financially invested in these platforms, the "decentralized" finance platforms like MakerDAO are pretty interesting at best so I just check once in a while on Reddit/Twitter what's happening to these platforms. These platforms, and even Ethereum itself are quite centralized unfortunately, which in itself turns me off. Bitcoin is simply the only fairly decentralized platform we have right now so I focus on that.

It is promising because it's on the first stage and people are getting hype with that because it's a new aspect of innovation in finance. But this could also share the same fate with the forgotten dapps that were also been said to have the potential.

Just like the ICO before, when we have heard of most them to be as promising as we were excited about them but suddenly that expectation was quickly gone after a year.

It is only good as it gets, if projects are not going to take advantage of this so called decentralized finance then how can we leverage it? I think it is more applicable to stable coins though, because as far as I can understand, like "Dai". But we will see, it is too early though, we haven't really touch the surface yet as this point.

Edit: Bitcoin (BTC) is the only DeFi!

The current financing systems have proven to be deficient in many areas, especially with the rapid development of networks and the Internet, so technology must accommodate these recent changes.

Blockchain will change many financial concepts^[1], but this does not necessarily mean that financing is completely decentralized, "absolute centralization is impossible", so systems will be decentralized more than the current situation.

As for Bitcoin and other cryptos, many cryptocurrencies (Shitcoins) have no value and therefore will die over time, which will remain Bitcoin and a few of the currencies with real projects.


[1] https://ocw.mit.edu/courses/sloan-school-of-management/15-s12-blockchain-and-money-fall-2018/video-lectures/

Oh, it's really very simple here. The main De-Fi projects are the usual copying of the most profitable and understandable services in banking. Reminds the lending market of third world countries :(

Of course, revolutionary ideas come to people's minds. But usually it all comes down to the fact that running a business is a risk, quite large, competition, and so on, and scam is almost a guaranteed profit, with a good ROI. Now projects can easily enough afford loans at 1, 0.01%, at fantastic 0% or even a negative rate, while remaining in the black. True, crypto users are so badly fed with bad projects that even good ideas are labeled “scam”.Scammers used to collect millions of dollars in ICOs. People began to look at ICOs as an opportunity to raise funds. Then, in desperation, the business decided to give a reward, they also began to water the feces. Landing? "Even if a person read only the name of the coin and immediately ran to make a post." I believe our business is to select really promising projects that will exchange real income in the future without any simple actions (no, spam on social networks is horrible, I think this should be prohibited).Or those that make cryptocurrency more accessible and more technologically advanced (Not the projects that build the second JP Morgan, but introduce some imperceptible, but very promising changes at the micro level).

I can't say it is used perfectly right now but the reality is that the world is vast and finance is even bigger, so maybe one day it would be used perfectly to a point where it helps people who otherwise can't get help from anyone else. Sure, it will take some time before it reaches that point but at the same time anything worth doing takes time to do it as well.

I personally think DeFi will eventually rise to a point where it will basically be bank or any financial institution that poor people around the world in third world countries can take advantage of with the help of the rich people all around the world, and I don't mean rich like Bloomberg rich, I mean rich like you and me because many people in the world lives under 30 dollars a month now, DeFi is for them, not for us (at least not now).

De-Fi can deliver money at a rate close to 0 (0.01%, for example). This kind of help will be really interesting for them, as they will be able to use the risks of the crypto industry to their advantage, and in this case they will be able to get a fairly high profit.

From the look of things, it will be a profitable sector for investors and traders during the next altcoin/token bubble. That's my primary interest.

The use of trusted third party custody, third party APIs, centralized oracle-type administrators, etc. on "DeFi" platforms makes the "decentralized" characterization somewhat underhanded.

Still, the automation and incentive mechanisms employed are at times impressive (MakerDAO in particular is doing some pretty interesting stuff). I also appreciate that these platforms can make loans and micro-loans much more accessible than now. It's worth pointing out though that a lot of the interest and money flowing into this sector is very speculative. It'll be interesting to see who the Amazons and Googles of this sector will be many years from now.

If defi grows out to become a huge industry, I'm confident that the centralized finance industry will improve the quality of their service further and reduce the fees or in some cases offer free finance to those who really need it.

In fact, it's already happening; there are numerous countries already where you can wire money instantly and for free at any time of the day, even during holidays. I have seen those memes on Twitter where people make fun of banks being closed and that Bitcoin always works, well, banks are getting there as well. Innovation triggers more innovation. Bitcoin innovated the banking sector.

Ethereum's defi ecosystem would be even better if fees could be paid directly in stablecoins instead of Ether. I know there are certain workarounds with smart contracts, but it should be made easy for the common joes who just want to use the simplest form of money.

Yes, we might see another overhype-type of Defi once we goes on another altcoin bubble.

@1Referee - I'm under the impression that they are going to used stable coins or at least a crypto that is pegged to USD - Dai.


https://medium.com/@airtm/what-is-dai-and-how-does-it-work-20cb356adf20

No. Its just hype.

And there is no "next economic era". It will stay the same old system. They will only implement some new controls, like credit cards under the skin, tatoos with codes, etc. You can see that Tesla guy is already into neurolinks, so in 20 years it will be all connected to your brain.

Cryptocurrencies will continue to be speculative assets, like they always were. As the price goes up, governments will try to control it. They will put limitations to its use, and people will just bow down to it, like they always do. Price can go to one million in eight years, but unless we have some "bitcoin nation" appearing out of nowhere, there will be several restrictions to use it.

I am not sure what you see in this project that you called promising.

yes today it has increase 174% but that is due to very small volume, per https://coinmarketcap.com/currencies/defi/, its volume is less than a dollar.
What kind of project would grow with that?


https://imgbbb.com/images/2020/02/05/binance-dex.png

Sorry, maybe we didn’t understand each other. DeFi - Decentralized Finance. At the moment, these are projects that provide an opportunity to invest and borrow cryptocurrency on credit.

I think OP is referring to DeFi which is an abbreviation for Decentralized Finance which is a promising sector utilizing the power of blockchain technology, and the one you've mentioned is a coin with an inaccessible website and last Github activity was on June 2019. :)

The way I see it they are trying to port all banking tricks&scams like leveraging, interest, futures, options etc etc into one place.

Like Baofeng said Bitcoin is the only defi. You either have bitcoin, or you don't. Defi is the same thing in the end but you know these bankster scum they make the simplest thing incredibly complex so you feel dumb and make mistakes. They make their money from your mistakes. Why do you think there are shitton of shitcoin shills out there? Their aim is similar, they are trying to fool and scam you.

Sorry, l my bad, I misunderstood it, maybe OP should also put more information like a link so people like me will not be mislead,  :P.. I was really thinking this was an altcoin project.

https://twitter.com/kermankohli/status/1228817561220812800?s=20

Defi is scammy nonsense riddled with holes.
Instead, buy and hold bitcoin. Simples.

https://www.trustnodes.com/2020/02/15/hacker-makes-360000-eth-from-a-flash-loan-single-transaction-involving-fulcrum-compound-dydx-and-uniswap

Correct, this is one hype, similar to the ICO craze of 2017, during the bull-run.

So we might hear about this whole Defi ecosystem once the market started on another bull-run. I'm still looking at it today,  and it really seems to be profitable for investors who have huge capital to begin with.

But for average joe's like us, bitcoin is still the best alternative, I mean it is the only defi before we ever heard "defi".

Defi projects help people do hodl longer.

That is, even being close to the peak and feeling that another altcoin will obviously begin to grow in price, we can not sell the main asset, but just take on the security of this cryptocurrency - stablecoins. And then get a higher profit. De-Fi projects can be used as a small leverage (with a ratio of up to 2). Something like this I see the math of such projects.

But purely theoretically there can be risk-free profitable DeFi (It sounds absurd, but I already have a model that works on this principle (this is not a pyramid, not mlm, but simply the result of mental gymnastics)).

With people looking into ways to exploit DeFi systems, it's going to be hard to fully trust decentralized products. The recent contract manipulation on bzx could as well be a sing that not even DeFi systems are fool proof. But I do wish they had used a several oracles to determine the true point of reference. Hopefully they will consider such platforms as Chainlink for future oracles.

https://i.imgur.com/fir1zjl.jpg?1

https://twitter.com/lopp/status/1240251570064949250

That pretty much says it all. The problem with many things, and especially ETH and similar contraptions, is that there is ALWAYS an unforeseen circumstance and ALWAYS someone present at the right moment to exploit it.

This is an area I'm going to leave to others to iron out for many, many years before taking the plunge.

I'm not into ethereum, but I like their utility projects, which aims for decentralization of finance.

Its unfortunate that bitcoin failed its purpose as a safe haven against financial crisis in the fiat system. The DeFi sector was nearly destroyed in the recent plunge, according to this article: https://www.longhash.com/en/news/3287/How-High-Leverage-in-the-Crypto-Market-Crashed-Bitcoin-to-

The whales are selling and the retails traders are buying! I think the dump was pre-plan by group of whales and some of them are still watching the market on the best price to come in again. I will say it is a game of manipulations.

https://medium.com/nexus-mutual/black-thursday-claims-3d9e74356992

Nexus Mutual, a 'decentralised alternative to insurance', has agreed to $786 in compensation for 'black Thursday' claims when it all fucked up.

That's great.

However $2,218,270 was turned down.

Sod this garbage.

https://twitter.com/DoveyWan/status/1251772447176536064

https://twitter.com/WhalePanda/status/1251786346282262528

A $25 million hack of summat named Dforce's defi funds.

I think it's well and truly time to stick a fork in this idea for all eternity myself. The safety simply isn't there.

@gentlemand. Also this news. dForce copied Compound's code hehehhe. It is paywalled, however. Does anyone have a theblockcrypto subscription? Kindly share the full article. Thank you.



VC-backed Compound is alleging that a fast-growing DeFi startup stole its code. The dispute raises questions about what 'open-source' actually means

A DeFi startup in China called dForce has seen notable growth in its lending protocol over the past two months.

VC-backed Compound says the company stole its copyrighted code – an assertion that appears to be supported by information on GitHub

The dispute highlights what “open-source” means in practice for technology firms.

Source https://www.theblockcrypto.com/daily/54389/vc-backed-compound-is-alleging-that-a-fast-growing-defi-startup-stole-its-code-the-dispute-raises-questions-about-what-open-source-actually-means

The entire Ethereum ecosystem has been an ongoing dumpster fire for years, ever since the DAO exploit. It's a never ending story of investors dumping hundreds of millions of $ into extremely risky and untested platforms, and then losing it.

But you know what? I'm pretty confident people are going to keep shoveling their money in. As irrational as it seems, I can still feel lots of hype bubbling underneath. Markets love to stay irrational. Assuming BTC recovers nicely into year end, I also expect Ethereum's anticipated transition to POS to amplify overall hype in the space.

@exstasie. There was also the parity bug where a developer accidentally froze more than 500k coins in an Ethereum smart contract.

Are those bugs there because of defects on Solidity the platforms programming language?

Not defects per se, but Solidity probably allows too much functionality given the sloppiness with which contracts are historically coded. It's very easy to overlook critical vulnerabilities. The DAO exploit and Parity bug were both examples of sloppy code.

Bitcoin's Miniscript, in contrast, offers much less functionality but also has a much smaller attack surface. https://www.coindesk.com/pieter-wuille-unveils-miniscript-a-new-smart-contract-language-for-bitcoin

@exstasie. Defects might be wrong to say, however, would you say that Solidity is a bad smart contract language that was shown to be not appropriate for creating dapps?

DeFi is one of the greatest functionalities of Blockchain.
Most of the projects are built on the ethereum blockchain - and this is what it makes ethereum competitive.
DeFi projects are going to have an increase in the value as it will be the starters of the mass adoption trend.

Erm, are you reading anything above? Projects are getting hacked and drained of all funds. Who the fuck would mass adopt that?

If they want it to take off it needs to have been 100% bulletproof from top to bottom for many years. Instead we get this. No one other than crypto propellerheads will ever go anywhere near it.

Just wondering...  Can an entity who holds a huge bag of, say, ETH use that bag to generate a ton of USD stablecoin from some Defi and pump ETH with those same generated stablecoins?