A not-so-decentralized DeFi – Decentralized finance aims to recreate all financial services on blockchain networks. However, some critics point to its lack of decentralization. Thus, their decentralization could, according to them, never reach that of the network. Bitcoin.
DeFi lacks decentralization
Blockstream is a company specializing in the development of solutions and tools for the Bitcoin network. Last week, Samson Mowthe former chief strategy officer of Blockstream, was interviewed by our colleagues at CoinTelegraph.
On this occasion, Mow addressed the subject of the decentralized finance ecosystem, which he considers to be only “not decentralized at all”.
According to him, DeFi protocols lack decentralization, as they can be changed by governance bodies that are often too centralized.
“If you can change a protocol at will, then you’re no better than a Fed-regulated fiat currency. »
Samson Mow
Indeed, the latter compares these protocols to Bitcoin and believes that the decentralization of the Bitcoin network complicates the deployment of modifications. A characteristic that according to Mow makes Bitcoin the only candidate for a global monetary system.
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DeFi, but only on Bitcoin
In the rest of his interview, Samson Mow does not say he is totally opposed to the idea of decentralized finance.
However, for him, this is only of interest if it is developed on a solid basis, namely that of the Bitcoin network. Thus, he only designs a DeFi ecosystem if it is built on a second layer network of Bitcoin, such as the Lightning Network.
“Lightning will supplant Visa, Mastercard and everything else. It reduces costs for merchants, which means a better experience and savings for consumers. »
Of course, Samson Mow preaches for his parish. Indeed, he recently left his job at Blockstream to found JAN3, a company specializing in the development of second-layer solutions for Bitcoin.
“JAN3 will focus on advancing Bitcoin and technologies [de niveau 2] like Liquid and Lightning, which are key to the mass adoption and circular economy of bitcoin.”
Several initiatives have already emerged to create a DeFi ecosystem on top of Bitcoin. In effect, several thousand smart contracts have already been deployed on the second Stacks layer.
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