That crypto is a house of cards with worthless tokens is an open secret. It is, to quote Bloomberg columnist Matt Levine, a toy system. But it makes for a good academic study into how risk and volatility are transmitted across a system. In the latest instance of this study, decentralized lending platform Curve Finance… Read More Notes 8/1: Hack at Curve Finance, Bitcoin Price
Tether, the algorithmic stablecoin that straddles all of crypto, released an attestation report for its second quarter this morning. As usual, it is a sham and a mishmash of meaningless statistics and assertions. The report does not provide much clarity about its finances though it does bring to light some of the underlying risks. According… Read More Notes 3/31: Tether Attestation Report, Stablecoins as Free Banking, and The Banality of Another DeFi Hack
There is never a dull moment in crypto. On any given day, there is a scam or a hack. On others, there is a controversy. The latest kerfuffle in cryptoland involves an NFT sale (what else?) and highlights two persistent problems: high transaction fees and regulatory uncertainty. The Otherdeed Mint: A Troubled Sale It started… Read More The Otherdeed Sale Highlights Crypto’s Persistent Problems
Total Value Locked (TVL) is one of the more interesting metrics to emerge from the Decentralized Finance (DeFi) ecosystem. TVL is the total amount of cryptocurrencies or DeFi tokens locked in smart contracts in various DeFi projects at that point in time. For example, the TVL of a DeFi-lending project will be a total of… Read More What Value in Total Locked Value?
Is decentralized finance (DeFi) a revolutionary reinvention of modern finance that should remain outside the bounds of regulation? Or is it jargon – algorithmic authority window-dressed as liberty and accompanied by the same problems as traditional finance – that should be hemmed in by rules? A new paper by Hilary J. Allen, Professor at the… Read More Does DeFi Need Regulation?
One of the conceits of Decentralized Finance (DeFi) is that it is different from traditional finance. The concept of a finance ecosystem governed by smart contracts, devoid of rent-seeking centralized institutions, is an enticing one. But two comprising situations on a decentralized finance protocol last week threw the nascent nature of the so-called DeFi ecosystem… Read More bZx Attack Shows DeFi Has The Same Vulnerabilities as Traditional Finance