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/biz/ - Business & Finance

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22658720 No.22658720 [Reply] [Original]

Is it just me or does anyone have a bad feeling about the pyramid of products that are getting stacked on top of each other so quickly? It just feels like it's all going to come crashing down as quickly as it's being built. I'm a fan of slow and steady, making sure the foundation you build upon is made of stone and not of sand.

>> No.22659288

>>22658720
Go back to NYSE grandpa

>> No.22659299

>>22658720
i would like some insight on this too

does stacking them on top of each other make them safer or more risky?

>> No.22659405

>>22659299
>is a taller house of cards more stable or not?

>> No.22659433

It definitely will, but the fact that they all use smart contracts and the loans are relatively low risk (like 1:2 collateral:loan ratios, which isn't that much leverage). In the old days with ponzi schemes, all the money would be held by one person who could spend as much of it as he wants without anyone knowing, and as long as everyone didn't try to cash out at once it was fine (see: bernie madoff). With blockchain we can see exactly when or if this happens.

I do think it will collapse eventually, but with how much money is locked in the defi space currently, I think the collapse will be a slow bleed over months/years even. The world hasn't really seen up front "honest" ponzis before (honest in the sense that all the transactions/contracts are public and verifyable), there isn't any real history to draw from to compare this too.

Also for what its worth, I think DeFi in itself is the future of finance and will be around forever, I can just see some of the more convoluted yield farms/food tokens/meme collectibles/socks/deflationary tokens/etc going to 0.

>> No.22659452

All of defi is overcollateralised so if a layer gets fucked, then only the layers above it get affected no?

>> No.22659496

>>22658720
Just people borrowing to yield farm, then using yields to borrow to yield more to borrow more to yield more and double/triple/quadruple counting of assets to raise values for more yield. Absolutely natural, nothing to see here.

>> No.22659690

It's the definition of systemic risk and it will cripple crypto in its entirety.

>> No.22659730

>>22658720
It’s just one form of power consolidation and it’s one that has worked in recent times (Amazon) regarding large vertical integration as quick as possible. Get big fast. The idea is to try to become the standard as quickly as possible before the market matures so the game theory mechanics encourages investors to go into Andres shitty collection of dimebag applications rather than anybody else’s. This happens in real life business more than crypto, you’re just witnessing this strategy take hold in crypto

>> No.22659781

>>22659288
inb4 noob gets rekt buying internet tokens at the top before 1929 lel

>> No.22659811

>>22659730
Precisely this

>> No.22659887

>>22658720
What you’re talking about is the risk of a bug being discovered in some widely used contract code and being exploited before it’s fixed. Fortunately, developers are paranoid about this and no smart contract that isn’t audited is being used by other projects. Just hordes of normies.

>> No.22660106

>>22659496
Hahahahahahahaha