Oh really now…
What’s in a name
Recently, in a speech to the Blockchain Research Center of the University College London, Senior Advisor, Carolyn Wilkins, suggested that decentralized finance does not live up to its name.
In his speech he stated that the concentration of power in proof-of-work, and proof-of-stake systems and the flaws seen in the governance of the crypto and DeFi sectors have already shown all-too familiar issues that are prevalent in a centralized society.
Carolyn, who is an external member of the central bank’s financial policy committee, and former leader of the central bank of Canada stated some of these examples were business failures, illegal activity, and financial losses for investors. She stated that these issues will continue to erode trust among investors in crypto-based financial services and their customers leading to more financial stress.
The best thing to do
Ms. Wilkins continued to state that the best thing to do in the interest of continuing in the sector would be to have the private sector and DeFi investors do more in ensuring the safety and proper governance of projects and digital assets. Currently in proof-of-stake systems those with the most amount of money have the most pull creating the same type of dynamics seen in a more centralized society today.
“It is in the interest of the private sector to be proactive’ Wilkins states the investors must rise up to demand change as that is critical to the industry as it must adopt the best practices and codes of conduct.
Wilson has stated there are more issues to consider that seem centralized as well. She spoke on crypto miners that can take advantage of their position and thus manipulate the market. She noted that open source platforms like Polkadot and MakerDAO still have emergency powers for leadership teams to unilaterally make decisions.
Wilkins finished by speaking of the window for positive crypto regulations becoming smaller by the day as traditionally regulated firms are applying blockchain technology to traditional capital markets and if crypto doesn’t “get its house in order” there may be captured by the market.