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Topic: De-Fi Regulation (Read 364 times)

staff
Activity: 2436
Merit: 2347
August 25, 2023, 10:49:38 AM
#40
We don't know how much of the supply it controls. Just because the blockchain is decentralized does not mean that the coin itself is also decentralized. If the coin is going to have a few large investors who control 51% or more of the supply, what decentralization can we talk about? I don't rule out that Musk, before pumping doge via twitter, accumulated a significant portion of the supply and then sold these coins to hamsters at a huge markup, because the price of DOGE from 2020 to 2021 increased simply many times, hundreds of millions of dollars could be made on it, especially considering the media weight of Ilon Musk.

Indeed. Elon Musk's Dogecoin holdings is a mystery to many. But even if he had 50% of all the DOGE, he would not be able to control the network itself due to the way it was designed. Only miners with their ASIC equipment will be able to do so. I don't think Mr. Musk will be able to afford lots of ASIC hardware just to "steer" the Blockchain to his own direction. If he does manage to pull it, the community will simply fork away to a new chain. That's the beauty of decentralization.

Perhaps he does not control the network itself, because he is not interested in that. He is interested in other games, games with price and crowd behavior, so he is focused on managing the price of this asset.

I think the same will happen with "De-Fi" platforms. If they integrate KYC, the community will fork off and carry on with the original project in a truly-decentralized manner. We must remain vigilant in these crucial times. As long as there's one cryptocurrency that's decentralized, there should be nothing to worry about. Just my opinion Smiley

It is enough to impose regulations norms for coin developers and take them out of the zone of anonymity and scams in this sphere will become much less.
legendary
Activity: 3220
Merit: 1363
www.Crypto.Games: Multiple coins, multiple games
August 22, 2023, 11:57:38 AM
#39
We don't know how much of the supply it controls. Just because the blockchain is decentralized does not mean that the coin itself is also decentralized. If the coin is going to have a few large investors who control 51% or more of the supply, what decentralization can we talk about? I don't rule out that Musk, before pumping doge via twitter, accumulated a significant portion of the supply and then sold these coins to hamsters at a huge markup, because the price of DOGE from 2020 to 2021 increased simply many times, hundreds of millions of dollars could be made on it, especially considering the media weight of Ilon Musk.

Indeed. Elon Musk's Dogecoin holdings is a mystery to many. But even if he had 50% of all the DOGE, he would not be able to control the network itself due to the way it was designed. Only miners with their ASIC equipment will be able to do so. I don't think Mr. Musk will be able to afford lots of ASIC hardware just to "steer" the Blockchain to his own direction. If he does manage to pull it, the community will simply fork away to a new chain. That's the beauty of decentralization.

I think the same will happen with "De-Fi" platforms. If they integrate KYC, the community will fork off and carry on with the original project in a truly-decentralized manner. We must remain vigilant in these crucial times. As long as there's one cryptocurrency that's decentralized, there should be nothing to worry about. Just my opinion Smiley
staff
Activity: 2436
Merit: 2347
August 21, 2023, 02:07:50 PM
#38
I cannot agree with the inclusion of Dogecoin in this list. Although it is a true POW with a long history, at the same time, with the arrival of Ilon Musk, this coin became dependent on one man who made this memcoin synonymous with speculation and completely killed the basic utilitarian function of DOGE. The DOGE exchange rate is now solely dependent on Ilon Musk's tweets and therein lies the centralized nature of DOGE. Unfortunately, this coin is not what it used to be.

Elon Musk can move market prices for his own benefit, but that doesn't mean he controls Dogecoin. More like he has a huge influence on the crypto market itself. The DOGE blockchain is decentralized, outside the control of a single person or entity. Mr. Musk's DOGE holdings cannot be used to make decisions on the chain itself. If Dogecoin were a PoS cryptocurrency, things would've been different. I'm glad it's still a PoW coin, at a time when most altcoins are switching to PoS. They're just afraid of mainstream governments with their "high energy consumption" FUD. But what most coins are doing is sacrificing decentralization by becoming "carbon-neutral".

We don't know how much of the supply it controls. Just because the blockchain is decentralized does not mean that the coin itself is also decentralized. If the coin is going to have a few large investors who control 51% or more of the supply, what decentralization can we talk about? I don't rule out that Musk, before pumping doge via twitter, accumulated a significant portion of the supply and then sold these coins to hamsters at a huge markup, because the price of DOGE from 2020 to 2021 increased simply many times, hundreds of millions of dollars could be made on it, especially considering the media weight of Ilon Musk.
legendary
Activity: 3094
Merit: 1069
DGbet.fun - Crypto Sportsbook
August 21, 2023, 10:01:20 AM
#37
I've read somewhere that the US proposed regulating "De-Fi" protocols. It wants to treat them as "Ce-Fi" by requiring developers to implement KYC/AML rules. This means you as a user will be forced to verify your ID to use a decentralized lending protocol, staking service, or even an exchange such as Uniswap or Pancakeswap. Would you imagine this becoming a reality in the near future? It would be disastrous! This would greatly defeat "De-Fi's" true value proposition which is eliminating the middleman from the system.

With the way "De-Fi" was designed, I hardly doubt the US government will be able to succeed in its efforts to regulate it for good. But knowing that they did sanction a decentralized mixing software like Tornado.Cash, tells me that we should not underestimate the government.

What are your thoughts? Huh

For a complete financial freedom, not only we need decentralized finance but also decentralized internet. Government like US which benefits from its regulation of global money would go to any extent to criminalize any thing that threatens their control. With the dependence on current form of internet, they can just block and criminalize access to exchanges that doesn't pays them. Its advisable to follow the rules of the jurisdiction you fall into. But what the oppressive government should realize is with the access to global village, it's much easier to change your home.
legendary
Activity: 3220
Merit: 1363
www.Crypto.Games: Multiple coins, multiple games
August 21, 2023, 09:51:10 AM
#36
Governments can find out who the CEOs of those DEFI platforms and it will not be difficult for them to implement those regulations. We are seeing this happening and the government will consider DEFI illegally operating just like the centralized exchanges operating in the US which were also deemed operating illegally.

This is why some are actually doubting they have not found Satoshi. Government can do lots of possibilities and the world can be a small town where everyone knows each other's dirty secrets.


Since when does "De-Fi" need CEOs to operate? Wouldn't that make them centralized? The only way governments will be successful is if they find out who the developers of the "De-Fi" platform are. But if it's someone like Satoshi Nakamoto, then good luck with that. Decentralization must prevail for people to escape the clutches to evil banks and governments alike. Without decentralization, we would get a "glorified banking system" subject to the likes of a few players.

I really hope governments don't enforce KYC on "De-Fi" or it will be the end of an era for good. Most platforms are centralized, so it will be easy enough to enforce regulations. Who knows if the crypto industry is heading towards a dark future? Just my thoughts Grin
hero member
Activity: 2800
Merit: 595
https://www.betcoin.ag
August 20, 2023, 01:25:38 PM
#35
I cannot agree with the inclusion of Dogecoin in this list. Although it is a true POW with a long history, at the same time, with the arrival of Ilon Musk, this coin became dependent on one man who made this memcoin synonymous with speculation and completely killed the basic utilitarian function of DOGE. The DOGE exchange rate is now solely dependent on Ilon Musk's tweets and therein lies the centralized nature of DOGE. Unfortunately, this coin is not what it used to be.

Elon Musk can move market prices for his own benefit, but that doesn't mean he controls Dogecoin. More like he has a huge influence on the crypto market itself. The DOGE blockchain is decentralized, outside the control of a single person or entity. Mr. Musk's DOGE holdings cannot be used to make decisions on the chain itself. If Dogecoin were a PoS cryptocurrency, things would've been different. I'm glad it's still a PoW coin, at a time when most altcoins are switching to PoS. They're just afraid of mainstream governments with their "high energy consumption" FUD. But what most coins are doing is sacrificing decentralization by becoming "carbon-neutral".

I think "De-Fi" platforms will please the regulators just to avoid being left out of the game. Otherwise, governments could close them down for good (if they're not as decentralized as they claim to be). The crypto world is constantly being challenged by the threats of centralization, so expect things to get worse in the long run. Assuming all altcoins become centralized, we'll be left with Bitcoin as the sole alternative against the corrupt monetary system empowered by banks and governments worldwide. Who knows what the future holds for "De-Fi"? Just my opinion Smiley

Governments can find out who the CEOs of those DEFI platforms and it will not be difficult for them to implement those regulations. We are seeing this happening and the government will consider DEFI illegally operating just like the centralized exchanges operating in the US which were also deemed operating illegally.

This is why some are actually doubting they have not found Satoshi. Government can do lots of possibilities and the world can be a small town where everyone knows each other's dirty secrets.
legendary
Activity: 3220
Merit: 1363
www.Crypto.Games: Multiple coins, multiple games
August 20, 2023, 12:54:17 PM
#34
I cannot agree with the inclusion of Dogecoin in this list. Although it is a true POW with a long history, at the same time, with the arrival of Ilon Musk, this coin became dependent on one man who made this memcoin synonymous with speculation and completely killed the basic utilitarian function of DOGE. The DOGE exchange rate is now solely dependent on Ilon Musk's tweets and therein lies the centralized nature of DOGE. Unfortunately, this coin is not what it used to be.

Elon Musk can move market prices for his own benefit, but that doesn't mean he controls Dogecoin. More like he has a huge influence on the crypto market itself. The DOGE blockchain is decentralized, outside the control of a single person or entity. Mr. Musk's DOGE holdings cannot be used to make decisions on the chain itself. If Dogecoin were a PoS cryptocurrency, things would've been different. I'm glad it's still a PoW coin, at a time when most altcoins are switching to PoS. They're just afraid of mainstream governments with their "high energy consumption" FUD. But what most coins are doing is sacrificing decentralization by becoming "carbon-neutral".

I think "De-Fi" platforms will please the regulators just to avoid being left out of the game. Otherwise, governments could close them down for good (if they're not as decentralized as they claim to be). The crypto world is constantly being challenged by the threats of centralization, so expect things to get worse in the long run. Assuming all altcoins become centralized, we'll be left with Bitcoin as the sole alternative against the corrupt monetary system empowered by banks and governments worldwide. Who knows what the future holds for "De-Fi"? Just my opinion Smiley
staff
Activity: 2436
Merit: 2347
August 17, 2023, 11:17:57 AM
#33
Decentralized altcoin is an oxymoron, seriously. An asset cannot be truly decentralized, having a management apparatus represented by a team of developers and funded by someone, be it a fund or a baker. The interests in the project will be, first of all, defended for this layer of investors. Even if the project has decentralized levers, such as community voting through wallets, there are many examples in the crypto sphere, where some necessary initiative was supported by 2 or 3 wallets, which concentrate more than 50% of the total supply of coins.

I see what you mean. Most altcoin projects are funded by VCs, leaving them with no choice but to reveal the identities of the development team. This would make them centralized, as they will be driven by investors' own interests. I think the only coins that are not this way are Litecoin, Dogecoin, Peercoin, and Monero. They are guided by the community every step of the way. Without an ICO or pre-mine, they'll remain decentralized and equitable for everyone.

I cannot agree with the inclusion of Dogecoin in this list. Although it is a true POW with a long history, at the same time, with the arrival of Ilon Musk, this coin became dependent on one man who made this memcoin synonymous with speculation and completely killed the basic utilitarian function of DOGE. The DOGE exchange rate is now solely dependent on Ilon Musk's tweets and therein lies the centralized nature of DOGE. Unfortunately, this coin is not what it used to be.
legendary
Activity: 3220
Merit: 1363
www.Crypto.Games: Multiple coins, multiple games
August 16, 2023, 01:16:44 PM
#32
Decentralized altcoin is an oxymoron, seriously. An asset cannot be truly decentralized, having a management apparatus represented by a team of developers and funded by someone, be it a fund or a baker. The interests in the project will be, first of all, defended for this layer of investors. Even if the project has decentralized levers, such as community voting through wallets, there are many examples in the crypto sphere, where some necessary initiative was supported by 2 or 3 wallets, which concentrate more than 50% of the total supply of coins.

I see what you mean. Most altcoin projects are funded by VCs, leaving them with no choice but to reveal the identities of the development team. This would make them centralized, as they will be driven by investors' own interests. I think the only coins that are not this way are Litecoin, Dogecoin, Peercoin, and Monero. They are guided by the community every step of the way. Without an ICO or pre-mine, they'll remain decentralized and equitable for everyone.

Sadly, all of the attention is on centralized coins these days. Don't expect the good-old coins to reach a new ATH anytime soon (except if BTC goes all the way to the moon). Most (if not all) "De-Fi" platforms are built without decentralization in mind, so we should expect them to please the regulators by incorporating KYC/AML measures soon. Who knows if this will mean the end of "De-Fi" for good? Just my thoughts Grin
staff
Activity: 2436
Merit: 2347
August 15, 2023, 02:40:49 PM
#31
For example? Any known altcoin is by definition centralized, as such an altcoin has a development team and major venture investors.

Not all altcoins are centralized.

Decentralized altcoin is an oxymoron, seriously. An asset cannot be truly decentralized, having a management apparatus represented by a team of developers and funded by someone, be it a fund or a baker. The interests in the project will be, first of all, defended for this layer of investors. Even if the project has decentralized levers, such as community voting through wallets, there are many examples in the crypto sphere, where some necessary initiative was supported by 2 or 3 wallets, which concentrate more than 50% of the total supply of coins.
legendary
Activity: 3220
Merit: 1363
www.Crypto.Games: Multiple coins, multiple games
August 15, 2023, 12:16:42 PM
#30
For example? Any known altcoin is by definition centralized, as such an altcoin has a development team and major venture investors.

Not all altcoins are centralized. We have decentralized alternatives to Bitcoin such as Litecoin, Dogecoin, Namecoin, Peercoin, and a few other old coins governed by the community itself. These usually have low market prices and a smaller market cap, as investors are only focused on the big players. ETH was once decentralized, but it turned into garbage once Vitalik and his team pushed the PoS upgrade. Now exchanges have all the power to do whatever they want with it. Things will get worse for ETH when most network activity will move off-chain (L2). It will leave the main chain smaller and vulnerable against centralizing forces.

I's say "De-Fi" was always a "sham" because developers never cared about making anything truly-decentralized. The use of centralized servers to host the frontend interface of a dApp, as well as the collection of IP address and the use of domain names controlled by ICANN is more than enough proof that "De-Fi" is not as decentralized as many claim it to be. Who knows if this will open the door for governments to enforce KYC/AML regulations? Just my thoughts Grin
hero member
Activity: 1148
Merit: 796
August 14, 2023, 08:58:45 AM
#29
I think De-Fi itself is already centralized, it's like Ce-Fi without KYC, but they still record your real IP address and they can control your coins through the centralized pool. If De-Fi get regulated, then it's no longer De-Fi and they should change their name.

However De-Fi and mixing service are different, you can't use De-Fi for anonymity purpose, while mixing service is definitely make you become anonymous and the government don't like about that.
staff
Activity: 2436
Merit: 2347
August 14, 2023, 04:25:01 AM
#28
If we want to attract VCs and institutional investors into crypto, regulation would be our only choice.

At the same time, funds have been investing in crypto projects for years, where there is almost no regulation. So, the presence of regulation is not so important for them to invest in some projects.

Despite the alarmimg threat of centralization, we still have a small number of projects that are actually decentralized. The only thing is that they're not as popular as their centralized counterparts.

For example? Any known altcoin is by definition centralized, as such an altcoin has a development team and major venture investors.
hero member
Activity: 938
Merit: 552
August 13, 2023, 07:58:28 AM
#27
I've read somewhere that the US proposed regulating "De-Fi" protocols. It wants to treat them as "Ce-Fi" by requiring developers to implement KYC/AML rules. This means you as a user will be forced to verify your ID to use a decentralized lending protocol, staking service, or even an exchange such as Uniswap or Pancakeswap. Would you imagine this becoming a reality in the near future? It would be disastrous! This would greatly defeat "De-Fi's" true value proposition which is eliminating the middleman from the system.

With the way "De-Fi" was designed, I hardly doubt the US government will be able to succeed in its efforts to regulate it for good. But knowing that they did sanction a decentralized mixing software like Tornado.Cash, tells me that we should not underestimate the government.

What are your thoughts? Huh

Sometimes, the US congress misplace priority or perhaps they don't have a good understanding of what Defi is or they thought it's just like their corrupt traditional finances we have had for the years. Decentralized finances is as useless like the traditional finances if it becomes KYC, the right to control will becomes a normal thing and important call and decisions will be difficult to make because of privacy issues. The system can't be control effectively of they allow KYC into the Defi, it will die and interests will not be there and when that happens, the adoption will die and failed impromptuly.

My thoughts? If they implement this, Defi will not grow, people will be scared to bring money into Defi because they will be scared to get question and who will not be afraid when your money can be trace and seize any moment in time. The Congress should face another thing that is troubling the country instead Defi, the Defi will mature with time just the way Bitcoin has improve over the years.
legendary
Activity: 3220
Merit: 1363
www.Crypto.Games: Multiple coins, multiple games
August 13, 2023, 06:51:54 AM
#26
Without regulation, crypto won't succeed. Sooner or later it is bound to happen. Especially since most defi or just different startups are scams and created for the sake of stealing other people's money. Now it is becoming clearer that different governments will make different laws about cryptocurrency.

If we want to attract VCs and institutional investors into crypto, regulation would be our only choice. It's unfortunate because it will deviate crypto towards the path of centralization. But there's nothing we can do about it, especially if we want market prices to go all the way to the moon. Despite the alarmimg threat of centralization, we still have a small number of projects that are actually decentralized. The only thing is that they're not as popular as their centralized counterparts.

When "De-Fi" gets regulated, the platforms which don't comply with KYC/AML rules will be left out of the game. Only people seeking true privacy/anonymity and freedom will use them. Crypto has come a long way since 2009, so don't expect it to disappear anytime soon. Who knows what other tactics will mainstream governments (especially the US government) come up with in the future? Just my thoughts Grin
sr. member
Activity: 2282
Merit: 439
Cashback 15%
August 11, 2023, 09:48:32 AM
#25
You can create any DeFi project, but you will not attract investments into it if you are anonymous and do not pass mandatory audits. Most likely, you will be forced to build a fallback shutdown into the smart contract to pause or slow down the project if there is a hack. DeFi projects are no longer decentralized.

That's the saddest part of crypto these days. Investors want developers to reveal their identities before supporting a project. Back in the early days, that wasn't the case. You can see how Bitcoin became successful even when no one knew the true identity of its creator. Unfortunately, those days are over thanks to the increasing number of scams plaguing the industry.

Nowadays, it's all about KYC and public appereances to help gather the attention of the masses. I have a feeling the industry is reeling away from its core principles of decentralization and censorship-resistance. Most "De-Fi" platforms aren't as decentralized as they claim to be. Once regulators get into the game, you can say goodbye to Web 3.0 for good. Who knows if "De-Fi" is heading towards a dark future? Just my opinion Smiley
Without regulation, crypto won't succeed. Sooner or later it is bound to happen. Especially since most defi or just different startups are scams and created for the sake of stealing other people's money. Now it is becoming clearer that different governments will make different laws about cryptocurrency.
legendary
Activity: 3220
Merit: 1363
www.Crypto.Games: Multiple coins, multiple games
August 11, 2023, 08:35:09 AM
#24
You can create any DeFi project, but you will not attract investments into it if you are anonymous and do not pass mandatory audits. Most likely, you will be forced to build a fallback shutdown into the smart contract to pause or slow down the project if there is a hack. DeFi projects are no longer decentralized.

That's the saddest part of crypto these days. Investors want developers to reveal their identities before supporting a project. Back in the early days, that wasn't the case. You can see how Bitcoin became successful even when no one knew the true identity of its creator. Unfortunately, those days are over thanks to the increasing number of scams plaguing the industry.

Nowadays, it's all about KYC and public appereances to help gather the attention of the masses. I have a feeling the industry is reeling away from its core principles of decentralization and censorship-resistance. Most "De-Fi" platforms aren't as decentralized as they claim to be. Once regulators get into the game, you can say goodbye to Web 3.0 for good. Who knows if "De-Fi" is heading towards a dark future? Just my opinion Smiley
legendary
Activity: 2534
Merit: 1338
August 10, 2023, 02:00:44 PM
#23
These regulations work completely against the logic of De-Fi, it has no meaning. Defi's completely transform into Cefi. I believe there should be different regulations besides KYC but KYC/AML rules should be invalid for Defi protocols so people can trade easily. A balance between market centralized and decentralized is essential. I don't think much will come of these suggestions.

What could happen is a mass exodus of developers from the US to other crypto-friendly countries. The government can't stop the revolution no matter how hard it tries. Trying to stop "De-Fi" is like trying to stop people from using the Internet. Adding KYC to a "De-Fi" platform is simply not an option because that would make it centralized. This will introduce the "single points of failure" crypto was meant to avoid in the first place.

Either the government doesn't understand how crypto truly works, or it's doing this intentionally to scare away as much people from crypto as possible. We'll see how "De-Fi" developers will respond when regulations come into place. I'm certain governments' efforts will turn into a huge failure. Just my thoughts Grin
You can be sure they are doing this on purpose, governments do not care if by introducing those regulations they are forcing a decentralized platform to become centralized, what they want is for the developers behind that project to comply to their wishes and that is it, however as you mention the Pandora's box is open and there is no way to close it now, and governments as much as they dislike this scenario and they may do all what they can to prevent people from using those platforms, at the end they will fail.
legendary
Activity: 1932
Merit: 1273
August 10, 2023, 01:09:03 PM
#22
Based on the related article's wording, which is, decentralized finance protocols, I doubt it will only be on the frontend level. Protocol-level implementation means the identity verification system is a gatekeeper that is inherently developed within the smart contract. Although, I did not know whether it is possible, to implement such kind of case, user/IP detection, identity submission, etc. on the protocol, in one way or another, it would simply become a centralized product just like regular services/platform.

But that supposes it is truly on the protocol level. Back to the main assumption, I tried to read the bill, but have no luck accessing the file: https://www.congress.gov/bill/118th-congress/senate-bill/2355.

I think developers might use something called "Oracles" to obtain personally-identifiable information and transfer the data to smart contracts. It's complex, but not impossible to achieve. That's if we're talking about adding KYC at the protocol level. But doing this will greatly defeat crypto/Blockchain tech's original purpose which is to eliminate the middleman for good.~

I see. Surely now I think it does doable. An identity management platform to fill the data to protocol level. Generally, we know that oracles govern the market price data to the smart contract, but in this case, it is the identity of the user.

Given that, it certainly would turn the so-called web3 ecosystem into just a regular non-blockchain centralized platform, as I have been saying. It is an attempt to authoritatively control the ecosystem. A very likely sane decision from many developers is surely to leave the US market in case the bill is enforced, I'm sure there is no benefit even from complying with the bill for the whole general market of the platform or service.
legendary
Activity: 1932
Merit: 4602
Buy on Amazon with Crypto
August 09, 2023, 02:37:35 PM
#21
I do not know if that's real or not, but there will not be any developer who would be willing to do that because after they release it, it's no longer their problem. It is purely ran by the people and there won't be any dev that can control it. That's why it's called defi, it's decentralized, so there can never be anyone who can ask us KYC in the logic of it, it's just not possible.

Of course you can try, but the simplest result would be people picking an non-American nation to build it, and just release it, then they will not care about what SEC or anyone else says about it, they do not even have to share their own KYC, which means that USA wouldn't even know who started it, could be an American as well and they wouldn't know.
You can create any DeFi project, but you will not attract investments into it if you are anonymous and do not pass mandatory audits. Most likely, you will be forced to build a fallback shutdown into the smart contract to pause or slow down the project if there is a hack. DeFi projects are no longer decentralized.
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