By Brent Xu, CEO of Umee
When first theorized, decentralized finance (DeFi) promised to create autonomous systems that would be cheaper, faster, more efficient, and more accountable than the finance systems of the past, facilitating greater participation in the financial ecosystem. Among DeFi’s envisioned use cases was an improved lending system built on this organizing principle. However, this vision is far from being realized.
The Problems with Status Quo DeFi Lending
Idealistic real world lending applications first envisaged by DeFi evangelists are yet to come to fruition. Instead, seduced by the tantalizing prospects of easy profits and dramatic short-term gains, the crypto lending ecosystem has acted as though it’s immune to the fundamentals that govern all debt markets. Rest assured, they are not, and periods of market stress such as the one we are experiencing now make that absolutely clear.
The…
