Decentralization is at the heart of the cryptocurrency universe. A libertarian principle that allows a reduction in possible takeovers and better security, divided to better impose. This philosophy is the historical ground on which blockchain technology is built. It is also the business of Decentralized Finance (DeFi) at present. Or more exactly the tool that can allow it to escape the regulators.
Sometimes great idealistic developments can turn into simple tips to try to get around a problem . This is clearly the case at present with DeFi and its not always respected desire to present itself as a decentralized environment . Indeed, certain protocols like Synthetix, Balancer or Aave pose serious problems of independence development teams who have difficulty letting go of the levers.
But control comes with accountability . And in the field, the US Security and Exchanges Commission (SEC) is clearly Father Fouettard. A data which seems to be a serious point of motivation for the most recalcitrant structures on the subject. Just look at how late 2017 ICOs are still being held to account with fines of hundreds of thousands of dollars.
DeFi and the "real" economy
The main protocol that could quickly enter the sights of the SEC and regulators is undoubtedly Synthetix . Its option of synthesizing stock market assets to allow them to pass through the door of Decentralized Finance is very interesting, but also very slippery. Because it amounts to putting a foot in the real economy and getting out of the DeFi bubble, which is not just speculative. A sort of financial Temporary Autonomy Zone (TAZ) which protects its members due to its disconnection from the traditional economy.
Regulators like the SEC are very fond of bursting bubbles . This is why these protocols are currently taking the lead. This by attempting the option of decentralization as a tool for diluting responsibilities and making it impossible to find someone responsible.
Decentralization in progress
Many efforts are made by the non-centralized DeFi structures to increase the community's share of ownership over their protocols . Just look at the success of liquidity mining, which is as much a way to bring in money as it is to remove control . Data highlighted by the Balancer Labs structure as part of the launch of its BAL token . Because even if Yield Farming currently makes it an intensive speculation tool , they remain governance tokens intended for the shared control of the community that owns them.
But to go further, the non-profit Synthetix Foundation just announced this week the dissolution of its structure into three separate Decentralized Autonomous Organizations (DAO). A movement followed by Aave who has just initiated the implementation of its latest milestone on "the path towards decentralized governance" with the Aavenomics formula . This involves a strengthened system of governance in order to "build what (their) community decides." "
Decentralize to disappear from speed cameras
Changes that can be traced directly to the recent decision by the SEC and the Commodity Futures Trading Commission (CFTC) to prevent the Abra company from offering tokenized stocks and fiat currencies as part of its crypto offering. wallet with a cryptocurrency exchange option. An offer that closely resembles that of Synthetix .
However, the founders of the Synthetix and Aave protocols claim that their decisions are in no way motivated by this case . It would therefore be quite simply a strange and very timely coincidence of timing .
“ Without naming names, the world of DeFi is populated with apparent [regulatory] violations that regulators simply haven't noticed yet . - Preston Bryne, Cryptocurrency Lawyer
Stani Kulechov, founder of the Aave protocol, explains all the same that he is actively working to increase his legal resources and to ensure that the protocol is sufficiently decentralized. The latter seeing in this option an “unstoppable” element to avoid possible prosecution by regulators .
DeFi would therefore not only have similarities with the ICO bubble due to the speculation that has taken hold of its universe. This could also be found in the accounts it will have to render in a few years, because of the multiple offenses it is committing with regard to financial regulators. See you in a few years ...
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