Why so much skepticism from DeFi? Are they that dangerous?

The DeFimania from 2020 has been replaced by the “NFTmania” from 2021. There is always a fashion in this room. There is always a big revolution around the corner. I mean these everlasting loves that last a few months. Passions are unleashed and fanaticism is born. But everything is very short-lived. One day a project arouses overwhelming enthusiasm, and the next day the person who has sworn forever to devote himself hurries to something new. Time goes by and we can now talk about decentralized finance (DeFi) with some objectivity.

Last Thursday, September 16th, the prestigious British magazine The Economist dedicated its cover to DeFi. Conclusion: “It is something dangerous and needs to be regulated”. What is the danger now? You could say the danger is security, fraud, manipulation and money laundering. In the crypto ecosystem, any criticism is generally interpreted as an attack. We have to remember that in this postmodern era, almost no one speaks to learn anymore. You take part in a public debate to win. As simple as that. The ultimate goal is the victory of our convictions. We accept what our ideas confirm. Unfortunately, in today’s world, disagreement equals enmity.

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Why so much skepticism from DeFi?  Are they that dangerous?
Why so much skepticism from DeFi? Are they that dangerous?

Now the new creates two opposing reactions. Some are afraid of the new. And others adore the new. Both extremes are harmful. You’re either for DeFi or against it. There are no halves. Things are totally accepted or totally rejected. Which, to be honest, seems absurd to me, because every innovation is imperfect. Above all, at the beginning it is a work in progress that needs the benefit of the doubt. The radical critic can kill innovation. But the fanatical adept can also kill innovations. Why?

Think of the Wright brothers’ invention: the airplane. The fanatic could declare the Wright brothers’ invention perfect in the early stages and oppose any improvement. This phenomenon is more common than we think. For example, a lot is happening to the Bitcoin code and the sanctification of its creator, Satoshi Nakamoto. Many quote Satoshi’s words as if it were an angel coming from heaven. It is claimed that the code is perfect and Satoshi was a genius in all areas of life. Apparently, Satoshi’s intentions must matter. And Bitcoin cannot get out of its dogmatic line. Who cares about the will of the Wright brothers?

In short, people make and make inventions. Personally, I don’t care about the original Bitcoin idea. I used bitcoin as I liked. That’s how I do it with the plane, the computer, the car or the bicycle. Technology is at the service of people. If humanity limits itself to the use of technology because the wishes of its creator must be respected, there will be no progress. In other words, the new can be criticized, reformed, modified and improved upon. This does not mean any betrayal on the part of the user. If anything, it’s a contribution.

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Is Defi a Good Thing? Yes sir. Is DeFi perfect? No. DeFi is in diapers. Obviously it has flaws. The aim should be to correct these errors gradually. I liked the article in The Economist. We don’t gain anything if we go defensive and call it a system attack on the “revolution”. The first to say the Wright brothers’ airplane was not very practical was not burned at the stake. We must not forget that progress is the child of criticism.

However, How should it be improved? The first thing is safety. The technology is still very unsafe. That means we need to put arrogance aside and improve technology. The recent failure of Solana is an example of this. Solana promises a lot. But not all promises are made the same. What is the best thing about Solana, why so much enthusiasm? Why so many hikes? Well everyone is talking about their great technology. But there are the details. In the word: talking. Talking is free. It is difficult to do. Reality teaches humility. Solana has a big flaw. The price is crashing. Utopia falls.

This explains the presence of so many fashions in this room. A fantasy is sold and money is made from the fantasy. However, there is a lack of patience to build the real “revolution”. Then a new fantasy is adopted. Yesterday it was DeFi, today it is the NFTs, tomorrow it will be different. The truth is that the DeFi ecosystem still needs a lot of work. In its current state, it is at great risk. Of course, that shouldn’t be a cause for discouragement. But on the contrary. In fact, it is a call to work.

It is important not to go to extremes. Obviously there are challenges, risks and dangers. But there are also great options. Of course it’s not a perfect system. But it’s a perfect system. In other words, we cannot put it aside in the face of the first obstacles. In my opinion, one has to listen very carefully to critics. After all, our future users speak.

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Skepticism is due to novelty. In other words, the experimental nature of the project. This is of course something new and still poses many problems. We know well that the internet wasn’t the best in the 90s. However, its potential was recognized. And this potential was the motivation for all investments made. DeFi has flaws, but it also has potential. We can’t forget that. We have to keep investing in the idea, but not romanticize it.

Of all the fashions in this room, some of the ancient remains have remained. Public attention is always drawn to the latter, but there is still a team at work. This work will pay off sooner or later. Organic growth is slow and in many cases imperceptible. But this is how the future is built: step by step. The same cannot be said of fashions. At the moment it is very difficult to know which fashions will survive and which fashions will fail. DeFi has a future. But we have to be patient. There is still a long way to go.

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