Remember how the banking system self-destructed after a few decades? Now imagine if banks only lend money to finance other banks, and you could have the concept of a house of cards as “decentralized finance” or DeFi.
Cryptocurrencies continue to grow, with bitcoin trading stabilizing below $20,000 for the first time since 2020. The chaos has spread to DeFi: Celsius, a leading crypto lender with approx. $20 billion, recently forced to freeze deposit withdrawals. Last week, crypto exchange FTX said it was bailing out one of Celsius’ tough competitors, BlockFi, with a $250 million loan, not long after rescuing the crypto broker. Voyager Digital.
https://www.wsj.com/articles/defis-existential-problem-it-only-lends-money-to-itself-11656503840?mod=rss_markets_main DeFi’s problem exists: It only lends itself money