BIS: The decentralization of DeFi is a dream! Control tokens and approval mechanisms facilitate the centralization of power.

The Bank for International Settlements (BIS) released its quarterly report last week, which noted that Defi has been struggling since the upgrade, arguing that its status is not good is a surprise. Although the issue of foreign security reserves is frequently raised, there are still no restrictions on compliance.

Distributed illusion

While DeFi can provide financial services without intermediaries, smart contracts can support a wide range of users. However, BIS believes some of the interference in the middle is unpredictable, and most DeFi supporters argue that the cast's current view is just a surprise.

“First of all, we need centralized control to decide on strategies and operations,” said BIS. Additionally, there are aspects of DeFi, especially Consensus, that drives a surge of energy. "

Most DeFi have control tokens. The control token can affect the improvement of DeFi operations by voting for recommendations or changes to management. Having more control over the tokens means stronger, more fundamental decision-making. There is a serious problem with revising the process for publishing managed tokens in the middle, as development teams and early investors often have a significant share of the ownership of the trap token.

DeFi vulnerabilities and instability

Broadband has been at the heart of DeFi platforms since its inception. Mortgages often require too much money for a mortgage loan, but refinancing loans after the loan allows users to generate a low return on their investment. dangerous place.

The figure below shows the large DeFi loan balance due to ETH exchange rate fluctuations. It can be seen that the amount of chains consumed due to too much effort is very large when the price changes rapidly. It is precisely because of these characteristics that BIS believes that the DeFi market is now less secure than the traditional financial sector.

Stablecoins is not in AQL status.

The risk of fixed profits has been mentioned in various publications and meetings, with the realization and income from asset storage being the main risk factors. The BIS did not use any questions (AQL) in its report to resolve current issues with fixed income securities. Thus, LIFT means that consumers can take advantage of the market without having to worry about the price.

However, this is not the case with fixed funds, most investors are willing to use fixed funds due to their reliability and ease of exchange, if the value of the assets stored after the securities fluctuate at fixed income at some point can be scary. This means that in the absence of NA, when security holders sense that the return on the asset has fallen, it often leads to a drain. The main reason for this confidence is the opacity of stored and unattended assets.

The traditional financial and crypto industries have been linked.

While the above issues have yet to be addressed by new legislation by authorities, existing finances have become more open to the crypto industry. As the left figure below shows, traditional businesses have already been willing to invest in crypto-related businesses. The figure on the right also shows that total cryptocurrency revenues have increased in recent years.

The United States also recently launched Bitcoin Futures as an ETF below, and the information above indicates that the rapidly growing market is in urgent need of regulation and access to human life faster.