GameStop and DeFi: Let’s Not Be So Quick To Judge
Fellow DeFi adherents, let’s slow down on the outrage about
GameStop (NYSE:GME) and the traditional finance system (TradFi).
Blockchain and DeFi offer lots of advantages over TradFi, but TradFi is not completely broken and DeFi is not necessarily vastly superior. Two core characteristics make them look very similar in a way that undercuts the criticism and negative judgments against TradFi.
First, DeFi and TradFi both require
collateralization, they just implement it in different ways.
Second, just like collateralization can break down in TradFi, DeFi has a significant exploit that lessens the effectiveness of the collateralization requirement.