Crypto News

DeFi in the spotlight as legacy brokerages break down

As retail trust in the stock market comes under strain, DeFi developers champion an alternative system

As legacy markets roil, brokerages break down, and accusations of market manipulation fly, longtime decentralized finance (DeFi) adherents can’t help but say “I told you so” when it comes to the need for open, unstoppable, and permissionless financial architecture. 

Earlier today, popular trading app Robinhood took the possibly unprecedented step of disabling the buying functionality on certain tickers following a massive wave of retail interest in heavily shorted assets.

Some commentators have pointed out the irony of Robinhood — an app that in name, marketing, and conception focuses on the principle of democratizing finance — now turning its back on what has been described as a popular revolt against deep-pocketed hedge funds.

In a statement to Cointelegraph, Sino Global CEO Matthew Graham said that the brokerage’s failures are a prime example of the importance of DeFi. 

“Robinhood’s pinned tweet states, “We are all investors. Our time is now.” But their outrageous decision to suspend trading in GME and other stocks revealed their lie and only further highlighted the enormous importance of the building that we do every day in DeFi. It’s no wonder that even as Bitcoin’s price appreciation has cooled DeFi adoption continues its hockey stick trajectory,” he said.

Even before Robinhood cut off access to certain assets, throughout the week users have been complaining about spotty service for multiple brokerages — prompting some to point out that an exchange like Uniswap can’t be turned off and doesn’t cater to any particular user.

Aave COO Jordan Gustave says that user neutrality is a foundational element in DeFi’s architecture. 

“In a world where deplatforming, disenfranchisement and unequal access to finance is a reality to most, the importance of open finance and protocols like Aave can’t be understated. Those building blocks called “DeFi” are keystone of a math-based, market and politically neutral financial infrastructure.”

BadgerDAO founder Chris Spadafora echoed that sentiment. 

“Badger’s goal is to enable users to use their bitcoin in open finance without the need to trust centralized platforms. That means no matter who they are, their opinions and/or their actions, they have the right to freely participate with their capital,” said Spadafora.

While it remains to be seen if the volatility and accusations of wrongdoing in traditional markets will lead to a wave of adoption, DeFi developers haven’t hesitated to seize this moment — one which they’ve long been preparing for.

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Disclaimer: The opinions expressed within this article are the personal opinions of the author. The facts and opinions appearing in the article do not reflect the views of CoinChapter and CoinChapter does not assume any responsibility or liability for the same.

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Founded in 2015, Coinchapter.com has become one of the leading resources for the crypto asset community. Created by a small group of cryptocurrency enthusiasts, Coinchapter.com was built to provide new members of the crypto asset community with unbiased listings of cryptocurrency exchanges and retail options that would allow them to buy the crypto assets that they wanted, how they wanted and at the price they wanted.

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