The risks and rewards of paying off student debt on the blockchain

“Nevertheless, it is really up to the end user, developer and borrower or lender to really evaluate the stability and risk of a smart contract,” says Reed Cumming, vice president and general manager of the compound. “I think we’re still in a position where there’s a lot of room for improvement.”

Anyone who knows the address of your wallet can see how much you have borrowed.

The DeFi platform also offers borrowers some privacy, meaning that anyone who knows your wallet address can see how much you’ve borrowed and when.

Crypto skeptic Molly White says this divides users into three camps: those who protect their privacy at the expense of being able to use the main crypto platform, those who leave little privacy to use it, and people whose identities and crypto wallets. Are publicly engaged. .

As the choice of platform comes down to liquidity versus privacy, many of the alleged benefits of decentralization તા privacy, anonymity, and independence from corporations નથી no longer apply. And managing these risks requires technical skills that most borrowers do not have.

On the one hand, White says, some believe that these platforms conduct financial transactions, once the domain of experts is available to anyone – “but on the other hand, people are being dragged into making risky decisions of which they have no knowledge.” Be able to do responsibly.

To support MIT Technology Review journalism, please consider becoming a subscriber..

Kim remains optimistic. He compares the situation to the early days of the Internet and says that despite the risks, DeFi has the potential to be mainstream. “I think DeFi will equate with central finance … just because of its transparency and openness,” he says. “The ecosystem needs to mature, but I think that’s the case with any emerging technology.”

Similar Posts

Leave a Reply

Your email address will not be published.