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Just like the ICO boom of 2017, the "De-Fi" space seems to be heading towards an ever-rising hype cycle. It shouldn't be long enough before scams start "kicking in", making governments regulate the space in their entirety. If they impose heavy-handed regulations like they did in ICO's early days, "De-Fi" might no longer be the same.  Imagine developers being held liable for creating and launching a "De-Fi" platform on the Blockchain. The growth of the industry will stifle because of fierce regulations from mainstream governments. After what happened with ICOs, new denominations have emerged (namely STOs and IEOs). These new kind of ICOs have built-in mechanisms to comply with government's regulations such as seizure of assets and more. Something similar might happen with "De-Fi" if governments decide to start cracking down on the entire industry.

What do you think the outcome of "De-Fi" regulation will be? Will governments be successful at the task like they did with ICOs? Or not? Your input will be greatly appreciated. :)

What part of "DE" in DEFI don't you understand? No offense, lol.

Decentralized = No one can control, or regulate anything.

"DEFI" is used as a buzzword these days to lure suckers in to these crazy PnD scams. Want a real and UNIQUE DEFI project? Do some research on XSN.

XSN is solving the scalability issue on BTC + ETH. Making transactions pretty much INSTANT, and feeless via off chain transaction on a 2nd layer.

There is more info about the whole project in this thread:
https://bitcointalk.org/index.php?topic=5272923.new

I think if the blind DeFi craze continues like this, Governments would most probably try to regulate them as they did with the ICOs. As most of the DeFi projects work on a governance protocol, the Government can successfully regulate them by pressurising those who are capable of modifying the governance protocol which the DeFi projects rely on. 

This may effect the business of some defi projects especially those that will fall under the jurisdiction of the regulator that comes up with these rules. As we have seen in case of Dexes, only some have applied KYC etc to make them compliant while most still do not require that, I think same will be the case for DeFi projects, only those projects will call for these things where there will be no option other than being compliant with regulator.

Exactly bro, going by the number of Defi that are coming up every time in the market it won't be a surprise to see the government want to some how regulate it but in another thought I don't think that will be possible since it is decentralize and can not be in control of government.

They should be regulated like every business is being regulated where big money is involved and this should not be done to control or tax the projects but simply to safegaurd the investors and common people who will be using defi services in the future, regulated defis can give huge boost and then defis can be mass adopted by the public with peace of mind.

Before the regulations comes for the Defi projects I am sure that defi will become no value market so there will be no use of such regulations.In case if people found Defi as a revolutionary thing and not dumping the tokens even if the value are falling then the regulations should be needed but as an investors view they will just cash it out when the time comes and wait for the new hype.

I seriously doubt that they can get regulated. As I understand those platforms are self sustainable, noone does not need to oversee them in ordr them to work ,this is why they are very attractive. but if wee look from customers side, someone should verufy that  this or that is real defi ad will not take your money.

Many governments are watching this space closely. Not because of people getting scammed, but because of the ability to generate huge erevenue out of it, governments my control or rugulate DeFi projects especially. This is always in favor of countries to impose taxes on cryptocurrencies.

Successful or not, if some government authorities like SEC gets their hands on DEFI then definitely, it will be the end. It is supposedly "Decentralised", so if there are regulations and if governments are going to be involved, I would say that investors are going to stay away from it, specially of SEC are going to file cases after cases on the project itself, then it will simply lost it's luster from investors.

If there will be some type of governance or regulation over DeFi projects, then I don't think they can be called Decentralised anymore. It will be CeFi = Centralized Finance. What we can do as a user of this platform, is just to be responsible in joining these projects. As we are free in choosing the project we want to invest with, we should do our part not to be screwed by lame projects. The concept of DeFi is really significant as we can transact anywhere in the world without so much bureaucracy. However, it depends on the project if they are offering legit services. This is for us to assess which platform is legit or not.

It is impossible for DeFi to be regulated because legally, Decentralized is a violation so it cannot be regulated, and I think it's better not to be regulated. And it is better to focus regulation on the use of clearer currencies such as bitcoin and other coins because that is more important for the future of cryptocurrency.

You got some point. Even just cryptocurrency itself it's still difficult for some countries then this DeFi thing can be regulated.
But we all know that DeFi is really useful, a really great help for the finance. But there are still some cons on it, not all are only positive effects for using DeFi. Some people also using DeFi just to scam or take advantange on other people, that's why it's also one of the reason why DeFi is impossible to be regulated.

It's a good wish but it's never going to happen because it's decentralized, how do you expect government to intervene on this one? ICO is hundred percent different from DeFi, investors needs to safe themselves, are investors that stupid that governments is the only one that can safe them? So annoying

Actually agreed. But I doubt there are some bitcoiners dont want to make bitcoin to be regulated, I guess everyone who are into crypto dont want too. Yes adoption should be expanded and the fear of people on losing money cause of the idea that no one can control the value of bitcoin. Well thats a major play at hand. True decentralized with a greater risk. If defi will be become regulated then, say good bye to those scam projects that keep on rugging. Youll be all audited prior to launch.

It will probably just around "legal or illegal to use", doubt it if it's more than that like regulating the number of coins invested since that's nearly impossible unless they control the smart contract. Not to mention if everyone start using peer-to-peer network, then anyone can use it regardless of the legal status.

What's more important is education so the so called "investors" don't get fucked up due to their stupidity, just like recently when they buy food tokens like a maniac.

Agree. Based on previous events, the SEC does more harm to the crypto/Blockchain industry than good. Fierce government regulations will only scare off investors from the market. Consider what happened to the ICO industry once governments started to crack down on them. It's virtually non-existent, as everything shifted to STOs (Security Token Offerings) and IEOs (Initial Exchange Offerings) which enforce KYC/AML measures. If the trend continues, "De-Fi" platforms may be required to collect personally identifiable information for the government's own benefit. Smart contracts may be decentralized, but websites hosting them are not. A "De-Fi" platform creator could simply create a website that won't allow people to perform any actions unless their identity is validated. Only those who are tech-savvy enough and knowledgeable about crypto/Blockchain tech, will bypass this by interacting with the smart contract directly on the Blockchain.

Nonetheless, it's evident that every hype cycle brings massive regulations from mainstream governments. After all, they want a "piece of the pie". Their excuse is to prevent scams, abuse, and money laundering. But we all know governments' hidden intentions. They'd want to stay in control over people's money no matter what. And "De-Fi" goes against this since it's "banking for the unbanked". Ultimately, people will decide whenever they'd want to continue supporting "De-Fi" platforms or get out of them ASAP due to heavy-handed regulations imposed by the government. Let's hope all goes well for the sake of "De-Fi"'s growth in the mainstream world. Just my opinion :)

How decentralized is that De in DeFi though, when people host them on centralized servers ?

See

De-Fi apps are NOT 100% decentralized
https://bitcointalk.org/index.php?topic=5272080.0

Not to mention the fact that having a lot of DeFi tokens projects getting dependend on one single blockchain (one that also happens to have
scaling issues, security issues and high fees issues), can hardly be considered decentralized to begin with.    

In my opinion, DeFi cannot be regulated by governments. DeFi projects are civil transactions that are concluded and executed automatically through smart contracts. Such contracts, upon the occurrence of the conditions specified in them, are executed without the possible intervention of a third party, and this is precisely the main advantage of smart contracts. The blockchain technology used here does not allow anyone, including governments, to intervene and regulate such contracts.

scams already started long time ago for defi but the rates of the scams were still low  , thats why theres no regulations that happened yet but lets wait a while  and see if scams continues to grow , maybe thats the right time that government starts making a move but is that really possible ? to regulate the defi ? it could be possible to ico because ico werent destined to be decentralized but defi is known to be decentralized , thats why its called defi or decentralized finance .

I think it's quite difficult to determine the regulation that will be implemented in defi. It should be about to make the creator of defi will be registered its platform.

The government can't be called succeed to regulate the icos as there were so many icos didn't even registered as fully regulated icos. I will expect the same thing happen to the DEFI as this is just a bubble in the wild market and the government has no power to control it.

It's quite impossible to see the regulation for defi.

you are correct but their site host must be using a centralized server that can be trace by government. Not a total 100% decentralized so i guess Defi still can be regulated if the government wanted to. From what i see Defi hype might be not last longer.

The role of the Government, in this case, is possible in relation to the application of taxes only and to bind all, I don't think so.

This difference lies in the centralized financial system which involves the parties with the Defi system which is built with a decentralization pattern that only requires the internet, web, and applications to be able to connect to the protocol in a transparent manner in conducting financial transactions.

I agree that the government will not ignore the hype around DeFi. But because of the bureaucracy, they will only start regulating this sector when it collapses, leaving investors without money. And as a result of regulating this sector, it will no longer be decentralized.

the use of customs with feature of notification might helps trader to work on different option as appealing returns from manage on work with evaluation as following distinct on signals and work on decision as expending spares of part with use of balance as expecting returns on trading with chance of entrance into the table of trading with the DE-Fi crypto brokerage.

Most often, they write that this is just an experiment and that you invest at your own risk, what can be the responsibility here, they don't ask you to buy something from them.

If there is regulation with DEFI projects as well as ICO projects, everyone's interests will be guaranteed. Everyone will have to KYC and pay taxes from these activities.
If there is a real regulation for DEFI, there will certainly be few people accepting to participate and projects will have to reduce interest rates.
Everyone must choose to be safe and exposure to credibility and profit can be lower with risk and anonymity

It will be extremely difficult to regulate DEFI but if they are successful I can see the market getting wiser, the thing they can do is to Geo-block some countries or regions but with the help of VPN this can be solved. I have a feeling this has come to stay just like Bittorrent

I don't see the problem with regulation at all. I know some people don't like it but sometimes good needs to come to make sure people don't get scammed. I would say regulation has brought up a lot of good things including new investors and businesses who were scared of crypto before. Things have a way of correcting themselves if people start scamming like what happened to ICO but they are nowhere to be found now and people aren't getting scammed.

Regulation only happens when things get out of hands. If people play carefully then it can be self regulated which is its purpose anyway.

It's possible but hoping not. Defi must remain defi its should be the owner of blockchain must regulate whoever going to build a defi in their platform not the government.

Maybe the reasons why Government want to regulate those defi it because of tax and to fight Identity Theft.

What if any platform gotta regulated? Eventually they will all get slower increases and they will not make as much profit to people as they would unregulated, that is the answer. There is really nothing you need to worry about when it comes to regulation of crypto because there is no small detail regulations. When there is a law about crypto in a nation, it is a vast broad law that puts all crypto inside, they do not ask you if it is defi or bitcoin or eth or anything else, you just title it as crypto and pay your tax and you move on with it.

Nothing we could talk about or fear that would change that. Hopefully that will continue to go on in the crypto world, as long as governments keep putting all crypto into the same basket, we have nothing to fear about doing smaller stuff along the way.

I do not think that DeFi projects are going to be regulated atleast anytime soon.
The defi trend although is booming and is under the limelight at the moment but still due to the decentralized model it can escape regulation like most decentralized operations and platforms escape.

It would be great if defi projects are less anonymous, so that there is less scam. The cryptocurrency does not need regulation.

That's certainly true, mate. If that happens, then "De-Fi" will fade into oblivion. Everything will be the same as the ICO trend back in 2017. ICOs turned out to "lose their luster" as a result of heavy-handed regulations by the government. This produced new concepts like STOs and IEOs, making them no different than traditional IPOs in the mainstream world. For once, ICOs were meant to leave the middleman out from the system. But governments' excuse to prevent scams and abuse, has lead us back to the centralized realm. It's unfortunate something like this happened with ICOs after their boom in 2017. I have a feeling that the same thing will happen with the "De-Fi" trend.

In the bright side, crypto will always be crypto no matter what. This is thanks to its decentralized and open source nature. Governments may try to regulate the space in its entirety, but their efforts will be in vain due to the way crypto was designed. Even with the crackdown on ICOs, there's nothing stopping anyone from creating a new ICO without going through all of the regulatory hurdles. Since crypto is decentralized, regulation cannot be enforced. People can use other means to participate in the decentralized economy as we speak. Perhaps, "De-Fi" platforms will be used "under the table" after the massive crackdown by mainstream governments? Whatever happens in the future, will totally depend on people themselves. Legitimate use cases need to be expanded in order to avoid governments taking action against the industry. Otherwise, expect the events of the ICO trend to repeat themselves over and over again. Just my thoughts ;D

No it wont no matter we like it or not theres no such thing about on not getting any regulation intervention in the future.You know that if government likes to do so then they would force it up and when they found out for something that cant really be handled out then thats the time they would make out negative inputs towards it for people to hate and wont
consider as an option.DeFi is indeed getting hyped at the moment but just like what on said above is on where if things being hyped and do able to reach a certain
level that caught on governments interest then expect for intervention.

It is left to the investors of De-Fi projects to decide whether to invest in it or not even though it is not regulated,  investors knows the implications of investing in these kind of projects just as they did in the yesteryear of ICOs when ICOs was also hyped to lure many investors into it unfortunately many later became scam project.
For now these projects look credible while some investors had been attesting to making money from it and not bothering about any government regulations well if regulated in the future it will be a welcome development however for now investors are riding on its growing trend to make money.

Correct dude, the government will definitely find their part into defi projects in order to regulate their activities in the future. I believe they have watch the new era of cryptocurrency which is about defi projects, money flowing into this space will catch the government attentions soon. Though, this will be a good initiative from the government as many issue about scamming can be check at regulations points.

Couldn't agree more with you, mate. Sooner or later, governments will impose fierce regulations within the "De-Fi" industry. After all, they want a piece of the pie of crypto's revolution. Since decentralized finance provides freedom to everyday people, it goes against what has been established in the first place. The same way governments have successfully regulated ICOs, they same way they'll be able to regulate the "De-Fi" industry. Governments could simply hold "De-Fi" platform developers accountable for their actions. They could require such developers to force compliance of KYC/AML regulations among users of the platform, effectively bringing traditional banking to "De-Fi". Since "De-Fi" is not as decentralized as one would thought it would be, it's easy enough for governments to take action against it.

Ultimately, it's all about "survival of the fittest" than anything else. Decentralization needs to be put above all else, in order to render governments' efforts worthless. Otherwise, the so called "De-Fi" industry will see its demise in the future like it happened with the ICO boom back in 2017. Time will tell us what lies ahead with this rapidly-growing industry in the crypto/Blockchain space. Just my opinion :)

With the boom in projects using DeFi the attempt for regulation is on the way.

The governments don't like having anything running loose specially when their room for argument is money laundering which inadvertently involves lots of money which is why I think they won't look the other way but instead think of strategies to regulate it somehow.

If DeFi is to replace banks in the future which I think it's a plausible outcome then I do believe some form of regulation is required. Its implementation will be rough but it will give skeptics piece of mind.

since it is decentralized system, would be hard to implement some sort of regulations on this business. the government should be thorough on how to be hard on these projects. right now, i dont know what kind of regulation they will take on these DeFis.
 for the moment, it is the user's responsibility on how to avoid being rekt. no one will take care of their hard-earned money but themselves.

The governments or at least US SEC is not successful in regulating ICO in 2017 and they are late in filing cases and they are just ramping up their litigations this 2020. And besides they have Hester Peirce, which is a pro crypto, so I doubt that they will ran after this DEFI hype for now.

And what they are after right now is that those ICO who misinterpret their fund raising, they are after who run an security based on their definition. So unless they categorized DEFI as security then I doubt that they will go after it.

Governments have their own rules and regulations now and Financial Systems, I don't think they will plan to regulate DeFi to be adopted by the government, its still to volatile to do so, each country have their own security protocol even in Internet and have rules or laws regarding crypto implementation, some may open to the idea but many just want to stick in the old school system., it will be hard to regulate crypto or Defis especially if the company who built it is from different country.

In my opinion it De-Fi platform cannot be ruled or cannot be regulated by any government knowing that this is decentralize and if that will happen government in every must first acknowledge all the crypto especially all those blockchain that uses De-Fi platform before the can or if they want to regulate it.

I want to see it regulated to avoid people from getting scam but I don't see how are they going to do that it's a smart contract-based platform which has truly decentralized features all interaction are without a third party, how can authorities regulate something where they have no way of disrupting all the transactions.

If something is truly decentralized, then it can’t be regulated. I am not into these DeFi craze, but if I’m right, that De' in the name stands decentralized, so the government doesn’t have the ability to regulate them when they are decentralized, unless they are some kind of centralized platforms and then will the government be able to lay it’s hands on it and put them under control. One thing with all these overhyped projects, they are not going to be there forever.

ICO is quite different from this one and even till now there are still projects that are still using ICOs. A lot of other new projects are jumping on the DeFi trend to launch their projects, but the question is how many of them will be around later?

With governments capable of doing anything, I wouldn't be surprised if they ban people from using "De-Fi" services in the future. Or at least, they'll implement heavy-handed regulations that will stifle the growth of this emerging industry in the mainstream world. As far as securities go, I think that "Yield Farming" with their respective tokens qualify as a security. After all, people are investing in a platform's specific token to earn rewards in the long term. It's similar to earning dividends on the stock market. While it's hard to enforce regulations on "De-Fi" platforms, the government could easily hold developers accountable for their actions. They could fine the developers of such platforms by not complying with KYC/AML regulations or securities laws. There are so many ways that governments could put an end to scams in the "De-Fi" space limited to their own imagination.

Believe me, if "De-Fi" becomes regulated like ICOs, the growth of the industry will slowly decline. At least, you'll be able to access these platforms thanks to the decentralized nature of Blockchain technology. But things will not be easy, as governments will be on your tail following every action or move you make in the space. If you're a "De-Fi" platform developer and get caught, you can face fines or even jail time by not complying with fierce regulations imposed by the government. Consider what happened with EtherDelta's founder, and you'll see what I'm talking about. Just my thoughts ;D

P.S. It seems that governments are concerned about the "De-Fi" craze. More info about that here: https://cointelegraph.com/news/regulatory-risks-grow-for-defi-as-a-money-laundering-haven (https://cointelegraph.com/news/regulatory-risks-grow-for-defi-as-a-money-laundering-haven)

Is it really bad that the growth of industry which was 99% about scams was stifled? And even now, with IEO and other variants, all these offerings are still mostly scams, they just became a bit smarter and put more effort, so instead of exit scamming they fake some activity to not be too obvious. If DeFi will repeat the history of ICO, it's better for regulators to step in, so that less damage is done to crypto ecosystem.

I don't believe the future government can control the DeFi feature. DeFi projects are going to the moon for its decentralization. Investors want freedom and privacy with their money. No third party is acceptable in this case. All governments want to control everything for taxes, some investors don't. Even though if take control than investor couldn't find any reason to invest.

While regulations promise to put an end to scams (or at least, stifle their growth), they certainly go against what crypto and Blockchain tech originally established. Adding regulators to the system, will be no different than traditional banking. This effectively brings back the middleman, making "De-Fi" utterly centralized. Inevitably, governments will regulate "De-Fi" just like they did with ICOs. In this case, they could hold developers liable for their actions. Governments could require developers to design "De-Fi" platforms that will comply with KYC/AML and securities laws. Those who're against this will face fines or jail time. It's unfortunate "De-Fi" will be heading towards this path, as governments always want a "piece of the pie".

Truly-decentralized "De-Fi" platforms might survive as long as developers protect their identities from government surveillance. An anonymous developer which creates a truly-decentralized (not hosted on centralized servers and trustless by design) "De-Fi" platform will render government's efforts in vain. We'll have to see what happens in the long run, as "De-Fi" continues to make strides in the mainstream world. Just my thoughts ;D

It's a smart contract-based,  I don't see where the government interference will come, they have to regulate and control the whole platform where the smart contract was created.

It's up to investors whether to trust the creator and the smart contract to proceed the execution.

DEFI in the future will be the mainstream, but there will be some changes.
The first is the decrease in annual profits from farming, and at a reasonable level.
Next, the majority of projects will use the funds they raise in pools to invest in real life.

First, i will like to say that ICOs was never regulated and governments Never succeeded in regulating ICOS. rather what we have is individuals presenting a case about projects that conducted ICOS but failed to meet up with expectations. there are lot of projects out there that successfully scammed people and made away with their funds while some are been arrested depending on how the case is been raised.

Most ICO issues been reported and successfully resolved by the SEC are old projects. what about reccent projects that failed to conduct sales in USA and other E.U countries. were they regulated?

i don't think The defi sector will be regulated but will be controlled and monitored to avoid investors loosing huge funds but WILL NEVER BE regulated. it goes against the modalities of cryptocurrencies.

The big question is how and who will regulate maybe Vitalik suddenly changes his mind and decides to impose his will and censor the smart contract, but that would ruin everything I don't think it can be regulated and there is no one can regulate it, we just shut out those who don't deserve to be part of the community, like exposing them.

I'd like to see that happen but the smart contract is made as no interference it is programmable code that cannot be altered once it is uploaded and it's for everyone to check the code they cannot alter the code they can just go to people who created that code but not the smart contract.

In these times of low economic activity, i think governments and countries prefer that people put money into some investments and move the money around. The De-Fi craze is doing exactly that. Earlier, you had to go through investment banks to move sums of money between corporations. Today, its happening on a massive scale with several small retail investors putting in money that leads to a much greater amount.
Uniswap had a volume greater than coinbase a few days ago. Think about it, Would the governments want to shut down such a movement of money or actually encourage it. The only thing going against DeFi is the propensity for scams. The only thing that can defeat it is itself. Otherwise, i feel the stage is set forthe established players to continue growing.

Governments may not be able to enforce regulations on ICOs or "De-Fi" platforms. But they'll be able to pressure developers and ICO operators to comply with regulations or face serious consequences. ICO tokens and "De-Fi" platforms will still be able to live on the Blockchain, but their growth in the mainstream world will be diminished due to government pressure. While some say regulations are good for the industry to thrive, most crypto enthusiasts (like myself) don't see it that way. Regulations will bring back the middleman, something crypto and Blockchain tech was meant to avoid in the first place. The fact that most "De-Fi" platforms are scams, will leads us straight through this scenario (heavy-handed regulations).

In the bright side, truly decentralized "De-Fi" platforms will be able to survive in the long run. Centralized "De-Fi" platforms (not trustless) will eventually face government scrutiny. For us to distinguish decentralized "De-Fi" platforms from centralized ones, we need to analyze the smart contract's code. Only then, we can separate the good ones from the bad ones. No matter what governments' efforts may be, people can still participate in ICOs and "De-Fi" directly through the Blockchain instead of a website. That's the beauty of the decentralized and open source nature of crypto/Blockchain tech. Let's hope "De-Fi" becomes a serious alternative to traditional banking than just an idea in the not-so-distant future. Just my thoughts ;D

The principle of DeFi is that it is unregulated, and this is what is of interest to most of the people involved in the crypto world. However, it does not rule out that DeFi will one day be regulated because of certain interests. And of course, this may violate the basic principles of DeFi.

well, the problem is I just read an interesting article on this subject.

But the next question is, who will provide the regulations? Will every country be concerned about this DeFi? because of course, DeFi will also affect various financial policies and financial systems of a country. especially if the project is successful in the country and the government does not like this.

Nobody can guarantee that DeFi will last longer in the crypto world before going to be replaced with other projects that are more interesting again. And we can't also trust too much on certain DeFi projects in a country.

Source:
https://cointelegraph.com/news/regulation-is-coming-to-defi-but-can-it-be-enforced

I'm not sure if the government is true in this. They somehow rejected to regulate Bitcoin because people never wanted it also and could be the same as Defi. There is no way to stop these scams projects but just ourselves. We already know what is legit and what is pretending to be legit. If we can assess that thing and help spread awareness to the community, in that way we can minimize the rise of scam projects, and soon they will totally stop.

When the time comes that the government would finally get a hold of DeFi or any other token, id say good bye to the massive trade returns. When tokens will be regulated the value would be much more stable and not volatile. Those lucky chances of gaining so much with little investment can say goodbye.

Indeed. If DeFi platforms become regulated by the government, they will be able to manipulate or control DeFi, and it's tokens. So its value will definitely become stable and not volatile that it is not worth for investment because you won't gain good profit from it. But I don't think governments will regulate DeFi platforms because many people still don't accept cryptocurrency due to fraudulent activities.

Every ico or defi or any other startup must register as a legal company. They sell their tokens for real money which is stored at a bank. And any bank, even if it is a private company, must enclose the information about its clients to the government of the country where it is legally registered. So decentralization is a kind of illusion)))

First there are very high potential DeFi projects today so imposing a regulation just because of some few scam projects won't work in my own opinion. The truth is, the good DeFi projects will speak for themselves and the scam ones will answer to a higher call. Remember, most major platforms in the crypto space today had private sale and ICO and when others were exiting scam they stood and continued their development; so same can be likened to the DeFi space. Investors are meant to do their best and invest in good projects but nowadays, they tend to invest after hype and that's where the problem always start from.
Furthermore, owing to the fact that DeFi stands for Decentralized Finance, it means that, on no account can it be regulated. You can hardly change the nature of a thing and still expect to be the same or offer the same level of services, thus should Defi be regulated for whatever reason, it will lead to the downfall of all DeFi projects and seriously no one will want that.

I think that would be very difficult to implement given that the source code is transparent and available for anyone to see. So in this case the liability not only falls on the creators i.e. coders but users also as if something were to go wrong you could say that the users failed to do their due diligence. That's the blame has been shifted, but at the same time there will need to be some sort of party being responsible for this, and I can only see this happen if one organisation was to take 'control' over this and reshape it into a more centralised organisation. This again can be seen as problematic.


I think the scale of 'DeFi' adds too much complexity, unlike ICOs/STO's where regulations were much easier to be added. This time is not so simple and I almost fear for what is going to be proposed as this is not a simple solution.

I don' think DEFI platfrom has a whole can be regulated, what is likely to happen is that regulators can decided to go after the main developers and if they are successful this would spoil the party for the DEFI market. I think we will likely start seeing more anonymous developers now

DeFi is still a new trend of numerous projects without direction. The immense loss that has been accrued in the space of short time isn't healthy, hence necessary measures and action need to be taken to safe others.
Due to ignorance of UK citizens to crypto derivatives, the regulation body has ban its users from trading derivatives and futures. The same thing is happening to DeFi, many don't even understand anything about DeFi, it's always about fomo and the latest catch.
Regulation comes with limitations though, the outcome may not favour everyone.

I don't think DeFi platforms will ever become regulated by the government in the future, I don't just see any possibility of that happening, because these are decentralized platforms that can work on their own without being regulated by anyone, just like crypto currency :), and about the scam DeFi platforms, well mate there are alot of scam DeFi projects right now although its not that much yet, lately I do see alot new DeFi projects coming up, selling their sh*t coins with no real use case,they are just using the magic "DeFi" word to lure investors.

And how do they plan on doing that? Nobody can regulate DeFi, they are fully decentralized and the ones I know their team are anonymous. That aside, when something is said to be decentralized, there is no way that it can be regulated by the government. The government can only regulate things that are centralized.

We can use the old exchanges we have as an example: there are centralized exchanges and the ones that are decentralized. Example of the centralized is Coinbase and the government regulates it, and decentralized is LocalBitcoin, no one can regulate such.

The Idea behind decentralization is basically leaving the regulatory agenies and institutions in the dark as long as the technology is concerned. the space is controlled by the general public and they get to decide what they want and what stands. If they community of people in the blockchain space decides to have a uniform government aside the government of the world, they can not be stopped but there is no way for government to control what they can not be in control of. It logically defeats the tech itself.

In this case the money is stored in the form of cryptocurrencies and as the name suggests that these exchanges are decentralized and there isn't any central authority that is holding your funds, so why they should provide any information about the transactions happening at their platform, this sounds like a really bad idea. There isn't any point in making the decentralized exchanges regulated as they only provide the exchange as a medium to do the trading in an anonymous manner where people shouldn't trust each other but have to trust the technology behind the system which is much better and the chances of getting scammed are reduced to nil.

There is no if. They will be regulated in the future, would get a bit different name, but the idea under it still will be DeFi. As soon as people will understand how sweet this DeFi pie is, they will try to take a piece of it. This always happens. At first no one cares (or cares, but have a strategic plan), but when it starts to generate huge money, it gets torn apart with rules, laws and etc.

In any case, decentralized finance will first win its fate of the cryptocurrency market, attract sufficient investors and followers to their projects, thanks to which they will receive strong enough support, and later, in order to function legally and have legal protection and legalization, each user and investor will still be forced to provide your passport details. I believe that no government will allow such projects to exist without control as long as the current state structure exists. I believe that for a decentralized financial system there should be political Will, if not in every state, then at least in a separate country.

with customs as defi might reach of different stakes on consumption terms on plan the work with the regulation helps on improving with the legal status to helps as pupils have with confidence to spares of expense with the offers from developer.

Unfortunately they do not register as a legit company, not all of them. Obviously there are ones that register and I am keeping them out of this discussion but there are two type of companies that are dangerous. One that doesn't register at all, we do not know who they are and we do not know where they are based basically we have zero knowledge about who they are and what they are trying to do.

The second dangerous ones are less dangerous but they are still risky to begin with, they register at weird small countries so that they couldn't be tracked down, is that even more dangerous? Obviously it is but at the same time it is a good business decision to go places like Bahamas or whatever because you pay less taxes so we do not know if they do it for illegal reasons or just tax reasons.

Governments won't be able to enforce regulations on "De-Fi" platforms because of their decentralized and open source nature. But they'll be able to go after developers whose identities have been revealed across cyberspace. In this regard, governments could hold developers of "De-Fi" platforms accountable for their actions. They can force developers to comply with KYC/AML and securities laws or face serious consequences. As you've said before, we might begin seeing more anonymous developers in order to keep the "De-Fi" industry growing. In this strange and bizarre world of crypto, anything can happen.

All in all, regulations will come as a result of scams taking place on the "De-Fi" industry. There's nothing we can do about this, since it's the government's job to protect people against malicious actors. As long as regulations are mild, there should be nothing to worry about. Otherwise, fierce or heavy-handed regulations will do more harm than good to the growth of the crypto/Blockchain industry in general. Just my opinion :)

i look positive on this opportunity because all the regulations of these tools could protect us, investors, from scams (especially what we faced in 2017 during ICO times)

yeah, besides just found a new stablecoin dex - xsigma, i'm interested exactly because they have credible founders, public company listed @nasdaq

The regulation will be making the scammer be so difficult to create the scam defi project. This will bring more security to the investors to invest in the defi platform. that can also be used to verify whether the defi is a legit defi project or not but the regulation will make defi becomes centralized as it must have followed all of the orders created by the regulators.
The defi can also help the regulators to collect the data too.

DE-FI is a very interesting area of cryptocurrency. And it is interesting because it is decentralized and regulators cannot do anything, except to bring the project itself to justice. By the way, the decentralization of DE-FI both attracts huge interest from users and repels some people due to the development of fraud.

As long as these platforms continue profitable people will stay there. At this point regulations are not a question of if, but when. They are a security measure firstly due to terrorist activity. Furthermore it guarantees extra safety for investors, as the names, addresses and everything else behind the DeFi platform will be exposed.
From this perspective I see investors can have more confidence when investing on the platform, what can even increase the demand for such projects. On the other hand, if what really boosts crypto currency market is dirty money then regulations are going to kill not only DeFi, but every crypto decentralized project...

I wonder how the regulators will find a solution for this decentralized finance, one thing is sure, the authorities will come hard on them and i do not think this trend will last for a long time. The hype had its time and it depends upon how much transparent things can be in the market. There might be good projects but what i generally see is pump and dump like we used to see when ICO started.

It can be done through the 3rd party and it doesn't need to create a direct regulation for the defi platforms.
The direct regulation for the defi platforms can be created too and it's easy for the regulators to create it. You must know that the regulation was coming from the government to give restriction for its civilians.
The tax can be charged to the defi platforms.

If the whole crypto is regulated, then these decentralized finance projects will have a big boost. It will be good if these get regulated. The only thing is that government needs to find out how they can control these defi projects and more importantly how taxes can be imposed in a decentralized way too.

It doesn't make any sense @Abiky, this question should be coming from someone who knew nothing about crypto, its like you don't understand the full meaning of de-centralized, regulations only have power over centralized projects, no regulations can work on projects built as fully decentralized

Seems that it turn to be like that, more and more project become worthless.

Scammers understand that there are good potentials to bring more money out from this trend and they are well aware on how to create fake projects and teams to attract investors. In terms of  regulations, since we talk about big amount of money, government once seen from their radar will be there to find ways for taxing this venue of investment.

Although there are some Decentralized projects in crypto space that aren't true decentralized, the team don't even know what they are doing calling their projects decentralized, maybe regulations can work on such projects, who knows?

If decentralized Finance projects became regulated in the future every investors will run because they aren't backing what they are built upon, decentralized Finance getting regulated means they are no more decentralized, like few projects in crypto space that claimed to be DeFi but still end up breaking decentralized rules, they simply aren't practicing anything decentralized but centralized

Then such DeFi projects are not real Decentralized projects, there is no such thing as regulate in decentralized world, never! Such should only exists on centralized projects, I've seen some fake decentralized projects most especially DeFi projects, they easy tampered with everything they build on decentralization word, those type of projects can't be trusted as real decentralized projects

Do you mean Ripple?  ;)

Of course there are projects that are not completely decentralized on purpose, but every decentralized project that does not reach a critical mass of miners or stake holders (depends on the consensus) is indirectly centralized to a few large players and accordingly such projects are also susceptible, although they have been developed in a decentralized manner.

I don' think a truly Decentralised platform can not be regulated by Government, the only thing they can do is to go after the founder, which I think this is the reason why Satoshi remain anonymous till today, if Government knew him they would have gone after him by now and I think these founders need to watch out for this.

New tech will always get the attention of government regulators. Crypto and blockchain are already major talking points. Especially during bull runs!

Since crypto been popular, the need to have a liscensed or be legit  or papers to proof their legitimacy is needed. It will depend on how they will be able to deal with the news and with the process knowing crypto and DeFi true purpose as Decentralized and involve money it possible that government will soon to require them. Alot of permit to continue operating.

I know that but we are talking about what will be happening when the defi will be regulated in the future? we know that if the creator of defi is not anonymous and it can be detected easily by the regulators.
If we are talking about the possibility for defi to be regulated and that might be the true story consider the defi like etherdelta can even be sued by the regulators.

You have to put regulations on the entry and the exit, not the in between and I doubt they could even get into the in between zone. Let's say you want to launder dark money on the defi system, and let's say you achieved it, how are you going to turn that into fiat money?

You will do so via exchanges, which means regulations needs to be on the exchanges itself. You can't have fiat from the defi system, there is no system that pays directly to your bank account, that wouldn't be defi at all. Which is why people will not be caring about regulations on defi for a very long time.

However what could possibly happen is that money that was inside defi system will not be accepted by exchanges and you will need to stay away from it in order to make a profit, that could be one way to make it regulated. Otherwise you can't make defi stop by some regulations, it will continue without caring about your laws since there is nobody that can stop it at the top.

There are two things that prevent the government from regulating DeFi, the first one may be difficult to regulate DeFi considering DeFi is
a decentralization that cannot be controlled. The same is the case with Bitcoin, which until now the government has found it difficult to regulate.

Then the second reason is the fraud that occurred in DeFi projects has not been too many like the case with ICO projects. So maybe the government is
still letting DeFi projects run. I hope that DeFi will not be regulated by the government until whenever, because I am comfortable with the current
condition. The problem is that there are many frauds on DeFi projects, this is only a matter of education. I am sure the number of victims who
were deceived because DeFi projects were decreasing right now. Because now investors are getting smarter in determining which real projects or
fake projects are.

Regulation of cryptocurrency by states, including DeFi platforms, is inevitable and this is not a disaster for it. Some regulation is needed to avoid massive fraud. The only question is what and how will be regulated. If the regulation is organizational and within reasonable limits, then this can only be welcomed. The main thing is that such regulation does not violate the decentralized foundations of the cryptocurrency. In my opinion, there is no reason for such fears yet. And the regulators are hardly able to do this.

Decentralized should be regulated free but as scams keeps increasing I will definitely accept regulations, scams is the only drag down for crypto I believe, if no there will be massive adoption right now and once regulations is real I'm sure more people will trust crypto more.

Regulations can clean scam rate to some extent for sure but if regulation is all we have to cure scam projects and hackers in crypto space why is decentralized projects ever created? Decentralized projects are meant to be more stronger and safer but none worked exactly for what they are created for, it's a big shame

"De-Fi" platforms can't be directly regulated because of their distributed nature. But governments can easily hold accountable developers for their actions. That is of course, if developers disclose their identities on the public Internet. But what if developers are anonymous? Then regulation becomes widely impossible. What governments can do is try to regulate centralized exchanges, as they serve as the Fiat on/off ramps for the crypto/Blockchain world. They can prevent certain tokens from being listed or even traded on centralized exchanges. But they won't be able to stop decentralized exchanges like UniSwap or JustSwap.

Nonetheless, no one can predict what will happen in the future. If governments find a way to properly regulate "De-Fi" platforms, then it'll be an end of an era for decentralized banking. Consider what happened to the ICO trend back in 2017, after heavy-handed regulations by mainstream governments. This caused the creation of ICO alternatives which are regulatory-compliant (like STOs, and IEOs). Something similar might happen with "De-Fi" platforms if governments successfully regulate them. At least, crypto/Blockchain tech will carry on as usual because of its decentralized and open source nature. Just my opinion :)