Thread by @fubuloubu

You know what? I just figured it out

The people focused on regulations see the parallels between DeFi and TradFi because they both share complexity (all finance is layered complexity)

Complexity isn't what caused systemic issues like the 2008 crash, the lack of transparency is.

https://twitter.com/angela_walch/status/1425278669316976640

We have *no idea* if TradFi financial products we are offered are what they say they are, because their composition is considered proprietary business info, so we have regulations there to force us to read through reams of incomprehensible paperwork to make sure asses are covered

However, DeFi is *transparent by design*, it is only through opacity that it becomes difficult (but not impossible) to see what it contains. That information is still there, and teams that do really well at documenting their properties (and risks) rise higher than those that dont

Further, anyone anywhere in the world can audit these claims *in real time*, raising up issues to the level of the collective subconscious of DeFi until it becomes a fever pitch. We *constsntly* bicker about the properties of popular and well-used protocols, and that is important

Bc that means people care! They care enough to explore each and every inch of these protocols, identifying risks and falsehoods through the magnifying glass of open source software. That's not something you can do in TradFi (not even close) and a very key reason DeFi is better

Ultimately, this balances with the difficulty of actually writing the software (which is very hard), but these are just tradeoffs that need to be considered when understanding the tech and how it fits in the bigger picture