Decentralized Finance

Full Title or Meme

Decentralized Finance or DeFI is a complete misnomer since world-wide finance is already decentralized as there is not a single central authority. What most people mean by DeFI is Blockchain currency or Anarchy in the financial sector of the economy.

Context

• New York Times article

  The idea that "code is law," observed in a 1999 book by Harvard University's Lawrence Lessig, has been embraced by the cryptocurrency industry, with some firms contending code can be a better arbitrator than traditional regulators. However, issues have emerged in the decentralized finance (DeFi) sector, with hackers this summer overriding smart contract instructions to steal $600 million from the Poly Network, which lets users transfer cryptocurrencies across blockchain networks. DeFi platforms typically are established as Decentralized Autonomous Organizations governed democratically by a community of users who vote with crypto tokens. Said Lessig, "We need a more sophisticated approach, with technologists and lawyers sitting next to behavioral psychologists and economists," to define parameters to code social values into programs.