Central Banks Can Save DeFi, as Weird as That Sounds

Central Banks Can Save DeFi, as Weird as That Sounds

International and Arab News

Ayn Rand’s followers dreamed of decentralized finance as the ultimate realization of their techno-anarchist utopia: freedom from both governments and large custodial organizations. But somewhere along the way, they got stuck on George Orwell’s Animal Farm where some animals are more equal than others.

Much of what passes as DeFi today is just “decentralization theater,” as Fabian Schar, a University of Basel professor of blockchain, describes it. In theory, this hot new crypto corner wasn’t envisioned to be controlled by big-bulge intermediaries. The self-executing computer code deciding how digital assets would be lent or invested was supposed to be impervious to manipulation. Developers weren’t expected to have special rights.

The reality has turned out to be different: From backdoors to kill switches, discretionary power is concentrated in a few players. You even have to pay for protection from “sandwich attacks” that place one transaction before and another after yours on the blockchain to steal your profit. The distributed ledger technology was supposed to leave all this Wall Street chicanery behind. But if a big chunk of DeFi has moved far away from its original vision, why not at least make it safe for all users by introducing the biggest