update 27 October 2021

Charlie Lee Airs His Skepticism with Regards to DeFi

The creation of Defi is primarily focused on providing a platform that runs on blockchain and is independent of other external centralized institutions. Mainly Defi platforms are supposed to be completely decentralized, and they help complete serious tasks by leveraging smart contracts

According to Charlie Lee, the creator of Litecoin (LTC), however, there is a high chance that centralized networks can be linked with a significant portion of Defi. Mr. Charlie suggested that it’s vital for Defi to have a centralized authority to protect against exploits. 

The notions of decentralizing money and the financial system are not similar concepts. Primarily, the invention of crypto assets like BTC was creating a safe medium of exchange. 

The decentralized finance world has seen vast growth, especially since the introduction of ethereum in 2014, leading to the global financial system’s significant evolutions. In the past few years, decentralized finance networks have been putting up strong efforts to change the traditional finance concept, including banking services like borrowing and lending. 

Crypto operations work on either the proof of stake or proof of work consensus algorithms, and Defi is utilizing the feature to create financial services like payment, exchanges, and lending. 

Although Defi is fighting hard to achieve its vision of complete financial revolutions, Lee is still unsure. 

Crypto assets are centered on decentralization and foster other features like ease of access and privacy. 

Bitcoin live price
price change

Based on Lee’s remarks, the Defi world is more of a source of complexities, and it may never be able to achieve full decentralization.