Thread by @0xPolysynth

FTX’s collapse can be thought of as the “Lehman Brother’s moment” of crypto.

Why?

This is one of the largest centralized exchanges collapsing in the history of crypto.

BUT…

This strengthens the ground for decentralized finance.

#FTX is a centralized exchange.

Unlike #DeFi, #CeFi has no obligations for transparent transactions.

No one knew of the excess leverage #FTX was holding until the recent liquidity rush.

Why?

What happens in a centralized exchange is that they are the custodian of your money.

If you want to liquidate your holdings, they need to give you PERMISSION to withdraw. Much like a bank.

That’s why withdrawals from #FTX could be halted.

Because someone else owned the money. Not you.

This is not the case in #DeFi.

You are the SOLE custodian of your assets. Even when you invest in #DeFi protocols, you are the owner of the assets.

You can withdraw them anytime you like.

The #FTX collapse is not a commentary on #DeFi.

It is a #CeFi failure.

When you OWN your assets, no one can keep them from you.

Many VCs agree with this.

“The premise of DeFi has, if anything, been strengthened by the collapse of centralized entities from opaque counterparty relationships,” Marc Weinstein, founding partner of Mechanism Capital, said to TechCrunch.

techcrunch.com/2022/11/09/som…

#DeFi is
➡️Transparent
➡️Permissionless
➡️Accessible to all

Now more than ever, the case for #DeFi is stronger.

Like and share if you agree that #DeFi is the future of finance.

https://twitter.com/0xPolysynth/status/1590715093742145536