Nic Carter & Linda Jeng || DeFi Protocol Risk: The paradox of DeFi – Mastery Review (Part 2)
OCT 18, 202272 MIN
Nic Carter & Linda Jeng || DeFi Protocol Risk: The paradox of DeFi – Mastery Review (Part 2)
OCT 18, 202272 MIN
Description
<p>"crypto markets are becoming highly interconnected with the traditional financial sector"</p>
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<p>DeFi is growing and is quickly on its way to becoming a new financial paradigm, yet there are financial risks in DeFi that manifest in new ways that we haven’t seen in the traditional financial system:</p>
<ul>
<li>Interconnections with the traditional financial system,</li>
<li>Operational risks stemming from underlying blockchains</li>
<li>Smart contract-based vulnerabilities</li>
<li>Other governance and regulatory risks</li>
<li>Scalability challenges.</li>
</ul>
<p>In an effort to remove humans and automate as much as possible through smart contracts, DeFi has introduced or amplified these risks. This paper explores all of these aspects.</p>