Is DeFi really a threat to centralized finance?

[7788bitcoin]

Point is that DeFi was here for longer time than ICOs and all that offering BS. People saw it because it was hyped recently.

I have seen threads regarding DeFi in this forum well before the hype started to explode but was not aware that it was here much longer than ICO and if that is the case the hype was methodical to align it along with the bitcoin halving this year and then reap the benefit that comes with it. Either way the team or the group of developers behind these are brilliant so that they could create the hype just in the moment of an expected rally .

[exstasie]

That depends on your definition of DeFi

Do stablecoins count as DeFi? Pretty much, if you ask me.

Stablecoins like Tether obviously aren't. They are centrally issued, redeemed, and controlled. Tether can freeze and blacklist USDT, etc.

DAI is a lot more decentralized, but not fully, and its centralized points of failure were on full display during the March 2020 crash and its aftermath. In truth DAI is mostly governed as an oligarchy by MKR whales, it can't maintain its dollar peg during extreme crypto volatility, and its collateral backing is now almost half non-bearer assets (including centralized stablecoins like USDC).

https://blog.makerdao.com/the-market-collapse-of-march-12-2020-how-it-impacted-makerdao/

I would say stablecoins can be integrated into Defi very easily since they can be easily tokenized on protocols like Ethereum, but that still doesn't make them decentralized.

[deisik]

Point is that DeFi was here for longer time than ICOs and all that offering BS. People saw it because it was hyped recently.

I have seen threads regarding DeFi in this forum well before the hype started to explode but was not aware that it was here much longer than ICO and if that is the case the hype was methodical to align it along with the bitcoin halving this year and then reap the benefit that comes with it. Either way the team or the group of developers behind these are brilliant so that they could create the hype just in the moment of an expected rally

That depends on your definition of DeFi

Do stablecoins count as DeFi? Pretty much, if you ask me. Does decentralized trading count as DeFi? Same as well. But there is value behind these endeavors even if there is some hype in it too. There are probably other fields of DeFi that have substance after all. It is like calling all cryptocurrencies shitcoins and ICOs scams, which is not correct. Even if true for the most part. Time will separate the good from the bad as it always happened in the past

That depends on your definition of DeFi

Do stablecoins count as DeFi? Pretty much, if you ask me.

Stablecoins like Tether obviously aren't. They are centrally issued, redeemed, and controlled. Tether can freeze and blacklist USDT, etc

I meant decentralized stablecoins, obviously

[pixie85]

I think that Defi is overhyped and if it's a threat then not in its current form.

You can see how defi projects are doing. Most are scams and even those that are looking decent were slowly losing value in the last 2 months. Their charts remind me of how XRP looked in the span of 5 years. Big hype followed by constant losses, just like when ICOs came out. Somebody even said that Defi are rebranded ICOs.

[Twinkledoe]

I think that Defi is overhyped and if it's a threat then not in its current form.

You can see how defi projects are doing. Most are scams and even those that are looking decent were slowly losing value in the last 2 months. Their charts remind me of how XRP looked in the span of 5 years. Big hype followed by constant losses, just like when ICOs came out. Somebody even said that Defi are rebranded ICOs.

Only few of them will really rise to cater the finance community. As early as now, several already exited their scams, so what can you expect from the remaining defi projects? Can they really implement a DeFi platform? Not really thinking that they will be a threat in the centralized finance industry. A long way to go for DeFis to even compete in CeFi.

[inoes]

The you think defi a a threat to the future of centralized finance? What's your opinion?

Why not? it's just that not all DeFi will last. the possibility that has complete features, high liquidity will become real DeFi. for the present, there are still many new DeFi and we have the opportunity to choose

[yhiaali3]

Possibly if it lasts for a long time, but I don't think DeFi will last long. It is like a bubble that is growing rapidly day after day but can disappear at any moment.
Add that it is not available to everyone in all countries of the world, as well as many people still do not trust cryptocurrencies or decentralized financing projects, so that there are many who work in cryptocurrencies still do not understand DeFi well, so it is difficult to say that it poses a threat to central financing.

[TheUltraElite]

I have seen threads regarding DeFi in this forum well before the hype started to explode but was not aware that it was here much longer than ICO and if that is the case the hype was methodical to align it along with the bitcoin halving this year and then reap the benefit that comes with it.

The Libra project was done in a similar fashion too. Remember the dApps development craze? They went crazy all over the altcoins section at one time after the 2018 huge dump as the next hype and buzzword. Like everyone was developing dApps for everything in this world and as if it was the solution to all problems. Now its DeFi and it is being used in the similar fashion to gather attention and to sell their own products to the public even if they are mostly vaporware.

Either way the team or the group of developers behind these are brilliant so that they could create the hype just in the moment of an expected rally .

Point remains same. They are vaporware to a large extent. With a increase in mainstream-crypto adoption we might see some of the projects do good and they actually up developing something worthwhile.

However we might brand some DEXs as so called DeFi, this only proves my point that DeFi was here for a long time but people never took it up as a new term.

[BTCappu]

With the way all these DeFi of a thing is going I am already losing hope in them. They seem to be heading a direction I don’t like, and that’s making so many people to lose hope in them, because it now looks like some Ponzi and quick money stuff.

But even if they were as good, I wouldn’t say that they are any threat, rather they are there to be making things a lot more easy for those who are ready to adopt these technologies and make use of them. It’s just like comparing Bitcoin and USD, which I wouldn’t say that Bitcoin is a threat to USD, but rather an easy access to the things we want to do.

[Ayiranorea]

Possibly if it lasts for a long time, but I don't think DeFi will last long. It is like a bubble that is growing rapidly day after day but can disappear at any moment.
Add that it is not available to everyone in all countries of the world, as well as many people still do not trust cryptocurrencies or decentralized financing projects, so that there are many who work in cryptocurrencies still do not understand DeFi well, so it is difficult to say that it poses a threat to central financing.

That's a wrong assumption. In my opinion DEFI will last, because the way it is been developed to operate is quite effective as the banking system. DEFI never serves as a threat to the banking, but it is a step forward in development. As of now it is very very young, but people are slowly getting used to it. The future will be decentralized functioning and bank too isn't an exception. Upon the same DEFI is an advancement in banking and not a threat anymore.

[redsun114]

Hyped technologies will always have their day, ico wasn't the first, dapps weren't the only one and defi will not be the sole hype of a new and improved version of blockchain technology neither, but they are the frontier of the tech and that is why they get so much more attention.

This is why I believe defi will become a "help" towards centralized finance, they are not going to be a threat and they are not going to grow so big that suddenly all banking and insurance etc finance world will change. Nothing can do that, even bitcoin itself fails to do that let alone just one part of crypto world. However what could happen is, these big financial companies can use all these technologies we improve to make themselves a lot better which would increase our adoption and prices as well, that is the angle we should be looking into it.

[yhiaali3]

That's a wrong assumption. In my opinion DEFI will last, because the way it is been developed to operate is quite effective as the banking system. DEFI never serves as a threat to the banking, but it is a step forward in development. As of now it is very very young, but people are slowly getting used to it. The future will be decentralized functioning and bank too isn't an exception. Upon the same DEFI is an advancement in banking and not a threat anymore.

This is not my opinion alone, but the opinion of many members here and I have read that on the forum, perhaps this assumption is wrong and I hope that DeFi will continue for a long time because it carries great features indeed, in any case I agree with you that the future will definitely be decentralized and the banks and the entire banking system will transform in the future To decentralization.

[XZERO1]

The you think defi a a threat to the future of centralized finance? What's your opinion?

Too soon to tell, on paper DeFi should be able to almost completely take the place of traditional centralized finance, but when it comes to real world use and practice things could change and it's normal to see some issues that we were not able to notice in theory, I think that DeFi is really the future and it's not going to go away but I believe its current form will/should change and get better in some minor details, and don't ever forget some of what you're seeing right now is pure hype so don't get too much invested in DeFi now and wait for its hype to cool down a bit before any kind of investment in this area, DeFi implementation by large is a very long process and is not going to happen overnight.

[cabron]

DeFi is a threat to centralized finance. The continuing rise of DEX right now and its clients are obviously a big threat to Cefi. More and more people are going to move to the DEX and Defi projects because of the scams and exchange hacks.

That's a wrong assumption. In my opinion DEFI will last, because the way it is been developed to operate is quite effective as the banking system. DEFI never serves as a threat to the banking, but it is a step forward in development. As of now it is very very young, but people are slowly getting used to it. The future will be decentralized functioning and bank too isn't an exception. Upon the same DEFI is an advancement in banking and not a threat anymore.

This is not my opinion alone, but the opinion of many members here and I have read that on the forum, perhaps this assumption is wrong and I hope that DeFi will continue for a long time because it carries great features indeed, in any case I agree with you that the future will definitely be decentralized and the banks and the entire banking system will transform in the future To decentralization.

Defi is just in the early stages of it. There will be more functions that will soon be developed to it.

[exstasie]

Do stablecoins count as DeFi? Pretty much, if you ask me.

Stablecoins like Tether obviously aren't. They are centrally issued, redeemed, and controlled. Tether can freeze and blacklist USDT, etc.

DAI is a lot more decentralized, but not fully, and its centralized points of failure were on full display during the March 2020 crash and its aftermath. In truth DAI is mostly governed as an oligarchy by MKR whales, it can't maintain its dollar peg during extreme crypto volatility, and its collateral backing is now almost half non-bearer assets (including centralized stablecoins like USDC).

https://blog.makerdao.com/the-market-collapse-of-march-12-2020-how-it-impacted-makerdao/

I would say stablecoins can be integrated into Defi very easily since they can be easily tokenized on protocols like Ethereum, but that still doesn't make them decentralized.

I meant decentralized stablecoins, obviously

Just pointing out that even "decentralized" stablecoins like DAI are rather centralized. They're backed by custodial assets (to hedge volatility) and their governance is highly centralized too.

DAI's failure in March really makes me question the viability of decentralized stablecoins altogether. Collateralization with bearer assets (to produce debt-backed stablecoins) inherently exposes CDP holders to great risk. I just don't know how promising future liquidity will be, given that.

[deisik]

Just pointing out that even "decentralized" stablecoins like DAI are rather centralized. They're backed by custodial assets (to hedge volatility) and their governance is highly centralized too

DAI is not the only pebble on the decentralized stablecoins beach

For example, there's EOSDT which seems more decentralized even though it follows the DAI collateralization model (as far as I know). But the question is (actually, two questions), can we have it any other way and is this the reason why we can't call them decentralized? BitShares employs a self-collateralized model, and I can't even imagine that you would ever call it decentralized. However, if we proceed with this assumption in mind, that no decentralized stablecoin is truly decentralized, then what is?

[solomine]

No. It's just a hype. Time will pass and we'll forget about it.
Stablecoins are more useful. And no volatility, which can damage users.I think, that it will replace defi tokens on this finance field. USDT can beat ETH... And as bound to euro, eurg token can be good

[SamboNZ]

I dont see it as a threat to centralized finance because it caters to a different niche market. Big financial institutions can adopt to it but it would take time since it would need to comply with existing laws.

[Nivia1st]

The you think defi a a threat to the future of centralized finance? What's your opinion?

no it's not a threat. Defi is an alternative choice for those who do not trust the current financial system. The presence or absence of DEFI will not affect the existence of a centralized financial system. then whether defi is the financial future? I do not think so. because completely trusting the defi is a mistake. Decentralization means that it cannot be controlled and it is very fragile. so the existing masintream financial system will remain in the future. because we can never fully trust Defi.

[KaratX]

The you think defi a a threat to the future of centralized finance? What's your opinion?

No I don't think DeFi is a threat to centralized finance because not all DeFi projects practice what they preach, they claimed they are decentralized but they practice centralized strategies, most DeFi projects team or developers don't even understand what true decentralized is.