Why DeFi is not a Ponzi Scheme
parthchopra.substack.com
Why DeFi is not a Ponzi Scheme
1–10 of 27 posts
Re: Why DeFi is not a Ponzi Scheme
#2Isn't security the biggest concern that's basically impossible to properly address in the current DeFi framework?
You have a lot of money being governed by publicly available code with irreversible transactions. There have been a number of exploits in the past and there's no reason why they would stop. Why do people put their money in a system where everyone is a target and a bug can bring their entire balance to zero with no way to reverse it?
Re: Why DeFi is not a Ponzi Scheme
#3It's a P0NzI sChEMe. Something completely different ;)
Re: Why DeFi is not a Ponzi Scheme
#4It says something when you need to convince people what it isn't
Re: Why DeFi is not a Ponzi Scheme
#5Wow, this article is so right. Excuse me while I invest in with 1000%+ yield that comes from []. Tether? Never heard of it. Also, ignore the millions being lost in scams (https://www.rekt.news/).
Re: Why DeFi is not a Ponzi Scheme
#6Isn't security the biggest concern that's basically impossible to properly address in the current DeFi framework? You have a lot of money being governed by publicly available code with irreversible transactions. There have been a number of exploits in the past and there's no reason why they would stop. Why do people put their money in a system where everyone is a target and a bug can bring their entire balance to zer…
Maybe because it is fully programmable and transparent, executing the same rules for all participants, with no restrictions?
Re: Why DeFi is not a Ponzi Scheme
#7Isn't security the biggest concern that's basically impossible to properly address in the current DeFi framework? You have a lot of money being governed by publicly available code with irreversible transactions. There have been a number of exploits in the past and there's no reason why they would stop. Why do people put their money in a system where everyone is a target and a bug can bring their entire balance to zer…
I'm wondering if newer projects like Cardano are trying to address reversibility at all. To me this looks like the real roadblock for crypto. No financial institution wants to go broke because of a bug in the code. Granted, this can also happen in traditional finance, albeit with crypto it looks a lot easier to achieve.
Re: Why DeFi is not a Ponzi Scheme
#8Isn't security the biggest concern that's basically impossible to properly address in the current DeFi framework? You have a lot of money being governed by publicly available code with irreversible transactions. There have been a number of exploits in the past and there's no reason why they would stop. Why do people put their money in a system where everyone is a target and a bug can bring their entire balance to zer…
I'm wondering if newer projects like Cardano are trying to address reversibility at all. To me this looks like the real roadblock for crypto. No financial institution wants to go broke because of a bug in the code. Granted, this can also happen in traditional finance, albeit with crypto it looks a lot easier to achieve.
Is this an evolutionary mechanism that weeds out buggy DeFi contracts? Not saying the process to get to the end with a few trusted contracts/systems is going to be painless.
Re: Why DeFi is not a Ponzi Scheme
#9Isn't security the biggest concern that's basically impossible to properly address in the current DeFi framework? You have a lot of money being governed by publicly available code with irreversible transactions. There have been a number of exploits in the past and there's no reason why they would stop. Why do people put their money in a system where everyone is a target and a bug can bring their entire balance to zer…
Maybe because it is fully programmable and transparent, executing the same rules for all participants, with no restrictions?
Just because it's transparent doesn't mean there aren't latent exploits, e.g. the DAO. Open source doesn't mean bug free, and having those bugs immutably etched into the blockchain where all your money is tied up is pretty terrifying!
Re: Why DeFi is not a Ponzi Scheme
#10The space certainly seems full of Ponzi schemes and rug pulls. This article spends a lot of words carefully dodging around that.