If you are here, you have probably seen the news and read the headlines: DeFI is the Wild West of crypto and is next on the regulators’ hit list. A haven for fraud, money laundering, criminal activity, hacks and rug pulls by insiders.
So, that’s it? Is that the truth about DeFI? The wild west doomsday headlines have been a part of the crypto world since the inception of Bitcoin in 2008.
We all heard the scary stories of how Bitcoin (and every other token) was the currency of choice for drug traffickers, organized crime and terrorists. How Bitcoin was a Ponzi scheme. How Bitcoin was about to be banned. How Bitcoin was dead. How Bitcoin was evil.
Now, we all know how these stories ended: the price of Bitcoin has reached over $50,000, you can use your own credit card to buy Bitcoin trough Coinbase and some countries are even using Bitcoin to replace their own currency.
So, what’s the truth regarding DeFi?
Is DeFi the Wild West that financial and mainstream media are trying to sell us? First, it’s important to know that the vast majority of DeFi related crimes in 2021 have been conducted by outsiders through hacking. You know, like the zillion times your bank contacted you to inform you your credit card numbers had been compromised in a security leak and someone hacked your data.
Does that mean that Visa, Mastercard or Amex are part of the ‘Wild West’, too?
No, it means that hacking is a component of our digital life.
The remaining crimes are rug pulls that occur when crypto developers abandon a project and run away with investors’ money. Just like in real life…
How do you avoid this?
Do your own research and be careful with projects where founding teams and developers have influence over the governance of the DeFi network. Another red flag is when they own a very large portion of the token supply. Here at wallstreetbets.com, the founders took only 4.99% of the total token supply. No changes can be made without votes from the community- making wallstreetbets.com a true decentralized exchange owned by the users.
So, is that the whole truth regarding DeFi ?
No, the truth regarding DeFi is that decentralized finance is a fast-growing industry. In October 2020, the value locked on DeFi platforms was $11 billion. One year later, that value exploded by more than 600% to $80.4 billion. Today, almost $90 billion has been deposited into Ethereum-based DeFi protocols so far, according to data from The Block.
Because DeFI not only brings traditional financial products such as loans to the blockchain, but also because DeFi seeks to eliminate the need for intermediaries in financial transactions.
The glory of DeFi is replacing exchanges, market-makers, asset managers, banks and other lenders with software protocols.
Yes, that’s the truth about DeFi. No more middle men and no one profits off of trading fees. We are now free to trust transparent code and math alone.
And that’s EXACTLY what you can do right now on wallstreetbets.com. You can trade anytime, anywhere, with no middle men.