Ryan Selkis says that the bitcoin network remained strong during this crash. I think that centralized exchanges are under-regulated. Now the issue here is we need to be very careful about what works and what doesn’t and kind of where the dividing line should be. Because when it comes to the decentralized lending protocols. You could watch some of these liquidations happen on-chain in real-time as they are happening.
During the liquidity crisis a couple of weeks ago the prices were getting drawn down. That’s painful for whoever’s taking out a margin position on-chain. But the protocols worked right and I think some of that is kind of missing here.
The real issues were in the centralized black boxes that are out on top of this. We’re basically holding ourselves out to be these really robust banks with good risk controls and really strong products. They’ll be run by professional teams.
When in reality they’re basically reserve banks with poor-risk controls. Even if they were defrauded some of these companies have 50% of your outstanding loan book be with one counterparty. I mean that’s just piss poor risk management right.
There’s no other way to slice it no matter how big the three arrows were in terms of it’s its imported as an industry player. So I think that’s one of the things that’s going to be hard that’s going to be a bell that can’t get on the wrong right.
I think that regulating centralized entities is important. In fact, most people that are serious in the industry talk about the need to regulate the centralized entities here. That is handling customer funds that are making markets and that are facilitating lending or exchange right.
I don’t know anyone serious that’s arguing against that. What the issue is going to be is where do we draw the line and can we ensure that some of the open protocols and peer-to-peer Financial activity. Like on-chain lending or like decentralized exchange is not touched and it’s thoughtful and vigorously defended.
It’s not thrown out with the bathwater. When we start to see some more stringent regulations on the centralized entities. If we do our jobs right kind of collectively as an industry. I think that’s where we’ll end up. The peer-to-peer will be protected and the centralized entities that look like Bank to regulated like Banks centralized exchanges that operate like New York Stock Exchange and NASDAQ they’re regulated as such that’ll ultimately usher in the next wave of growth and institutional adoption. So I think everybody wins if we can get that balance.