Litecoin founder: Decentralized Finance (DeFi) is just a play.
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Answer Litecoin founder: Decentralized Finance (DeFi) is just a play.
Charlie Lee, founder of Litecoin, has criticized the decentralized finance (DeFi) industry, describing it as “the worst of both worlds.”
His criticism comes after a hacker-trading exploited several DeFi protocols to get a million dollars — in just two transactions.
As we mentioned in previous articles on the Bitcoin Arab website, the bZx protocol was exposed twice from a hack, where the trader used a smart set of instructions to be executed in the form of one large transaction to exploit the DeFi system.
Then he did it again.
After the operation, bZx, which maintains the Fulcrum protocol, posted an update stating that it would use an “admin switch” to remedy the situation exposing that the supposedly decentralized protocol is not decentralized at all.
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Charlie Lee commented on this as a concern and said that if most DeFi devices can be shut down by a central body, then this is just a “decentralized theater.”
This is why I don’t believe in DeFi. It’s the worst of both worlds. Most DeFi can be locked down by a centralized party, so it’s just a decentralized theater. However, no one can undo a hack or exploit unless we add more centralization.
How can this be better than what we have now?
– Charlie Lee [LTC⚡] (SatoshiLite) February 16, 2020
At the same time, he noted, undoing or exploiting a hack always requires centralization, which makes DeFi no better than what we have so far.
But his comments were controversial.
Many users have pointed out that there are many different DeFi projects and we should not judge them all by just a few examples or just one.
Most commentators have also admitted that DeFi is still a new technology with its own growing pains.
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But at the end of the day, with $1 billion on the line, DeFi should do better and provide stronger protection.
Read also:
Loom Network improves DeFi
New partnership between Opera browser and Ontology project to develop decentralized finance
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