DeFi Black Swan or Curveball?

You can be sure that when banksters bang on about market efficiencies what they are really talking about is profit margins. While some blockchain technologies may be able to accelerate transaction settlements, and hence cut fees, these are of little interest to the average sap stuck in a jurisdiction over-burdened with regulations that encourage poverty.

So when DeFi promises to remove so many leeches from their traditional roles as middlemen, why is it surprising that the banksters will make life as difficult as possible for such projects? Banksters are just not in the business of making you rich at their expense. And so we come to the latest batch of DeFi news, with much of it of deep concern.

Risk of Black Swan Event Could End DeFi? A Look into CRV Liquidity Crisis

Worth reading the whole thread. Curve has been one of the smartest and most stable of pool protocols - but that could quickly change.

It starts in one corner with one exploit - then the ripples spread.

One interesting comment that wasn't really explored further was that of an "unprofitable exploit". I have mentioned this many times, that a financial attack need not by itself be profitable, but rather it can cause enough damage to a competitor for it to be profitable in the long term. For example, if you can break into a high-security vault, you don't actually need to steal anything; you just need the proof of insecurity for that company to lose customers to a more secure location - such as yours.

To call this a "black swan" is slightly stupid, as the whole definition of the concept is that it is rare and unpredictable; in this case, the data shows that such an event is predictable enough to warrant some mitigating actions.

While in a parallel universe, my "favourite" purveyor of swamp-pools is being touted as a "blue chip":

Top Trader Says One Ethereum Altcoin Has Now Reached ‘Blue Chip Status’ and Is Primed for Next Bull Run

Yes, it's Uniswap, with their inflated TVL based on a torrent of rugpulls and "yield farms".

So... not financial advice.

There are consequences:

Ethereum DeFi TVL Down $3.55B Since Curve Crisis

Still a long way to go for DeFi to yield its promises.