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Reposting my comment from another thread about DeFi. There's clear innovation and utility in that space and it would be a shame to kill it all over the worst crypto has to offer.

"There are financial primitives that cannot exist in traditional finance that I'd call pretty novel. For example flash loans allow uncollateralized loans for millions of dollars[0]. Or take KeeperDAO[1] or Dai[2] or any of the other meta protocols generating returns by providing utility. Also the sheer fact that this is all decentralized/identity-less is already a novel aspect.

[0] https://aave.com/flash-loans/

[1] https://medium.com/keeperdao/a-keepers-guide-to-arbitrage-mi...

[2] https://makerdao.com/en/"



> For example flash loans allow uncollateralized loans for millions of dollars

That's a bad thing, not a good one.


Read into it- it's not as scary as it sounds and it allows for more efficient aribtrage meaning tighter markets across services. The whole transaction is atomic meaning no risk for the lenders (lump sum must be paid back in a single transaction + small interest fee).


Flash loans are only executed if the entire transaction is valid monetarily. A transaction on Ethereum is like a database, if there are any issues it's rolled back.


> There are financial primitives that cannot exist in traditional finance that I'd call pretty novel

that sounds like a massive negative externality to me, not something positive




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