4 must read articles on Defi and decentralization
https://forum.cardano.org/t/how-can-we-bring-trust-back-into-financial-markets-with-blockchain/47094
Capital markets, those where debt and equity instruments are bought and sold, underpin our global financial ecosystem. But the technology underpinning the markets themselves is fraught with inefficiencies, eroding trust. Frederik discussed some important current themes around our capital market infrastructure, focusing on how central systems of record have typically led to trust issues for all market participants.
Recent events in our financial markets have proven that trust is more important than ever, and as power has been pushed to the edges, trust-gaps in our financial infrastructure have been exposed.
The recent GameStop saga 2 — a financial spectacle that was a good deal more contradictory 1 than a straight-up “David vs. Goliath” tale of Redditor retail investors 3 vs. predatory hedge funds — has sparked numerous blockchain commentators to step in to try to redirect attention to their bet 2 on a future overhaul of the financial sector.
Frederik Gregaard, CEO of the Cardano Foundation, is attempting to shift the conversation away 1 from heated arguments over the balance of forces, rules of the game, or legitimate tactics in the recent showdown between the little guys, the hedge funders, intermediaries, Robinhood and regulators.
https://panteracapital.medium.com/what-gamestop-says-about-decentralized-finance-d23f732ed81e
https://twitter.com/CaitlinLong_/status/1360246297115037697
“Free” trading apps like Robinhood aren’t free. They auction the ability to front-run their customers to the highest bidder. Hedge funds and High-Frequency Traders (HFTs) pay hundreds of millions of dollars annually to do just that. “Free” trading apps don’t work for their customers — they work for the hedge funds.
Ultimately their customers pay higher prices for their stock and receive lower prices when they sell. When the SEC charged Robinhood in December: “The order finds that Robinhood provided inferior trade prices that in aggregate deprived customers of $34.1 million even after taking into account the savings from not paying a commission.”
They got the 13th century tale backwards — robbing from the poor to give to the rich (hedge funds).
One wonders why the SEC allows that but not a bitcoin ETF. GameStop trades on only one exchange in only one country with just $67 million in average daily volume before the insanity. “Free” trading apps cutting off traders in the middle of trading sessions with no warning (fun to find out who wanted them to/forced them to cut off trading). Hedge funds paying to front-run retail investors.
Bitcoin on the other hand: Who can manipulate an asset that trades $70 BILLION a day on hundreds of exchanges in dozens of countries? Go figure.
GameStop is a colorful indicator of the tremendous desire for the decentralization of finance. Individuals are tired of centralized rent-seeking oligopolies controlling their financial lives. Tired of their value — in this case their private trade data — sold to the highest bidder.
This is the same underlying impulse in the rise of blockchain — and Decentralized Finance (DeFi) in particular. The power of the individual and open-source software over centralized for-profit companies.
There’s a very powerful new thing coming. Getting long blockchain is part of it — and a hedge against that uncertainty.
Decentralized exchanges like 1inch, 0x, Injective, Balancer, DODO, and Uniswap — are just code. They don’t front-run their customers. They don’t work for anybody.
The future is decentralized.
In the age of social media, many of us have already learned to self-moderate our online communications, remaining cautious of what we say, share, and do online.
Our comments, tweets, and posts have far-reaching consequences, spanning geographic borders and transcending language barriers; and sometimes, clashing with other cultures.
Social media mishaps now frequently make headlines, especially for those in the public eye, and have prompted many to ask who—if anyone—has the ultimate authority to decide what is appropriate for us to share online?
As a result, censorship throughout online communities has become a hot topic, fiercely debated on both sides by pro-censorship advocates and defendants of free speech and net neutrality alike.
As proponents of decentralized technology, the worldwide blockchain community has a unique opportunity to help steer this narrative. Here, we explore whether blockchain really holds the potential to transform online communications, and we discover some of the deeper implications of total freedom of speech via decentralized platforms.
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