Hi, and welcome back to the podcast edition of Untangled. If you’re reading this but haven’t yet subscribed, what are you even doing with your life?! I kid. (I hear chastising one’s readers is a top-notch strategy! 🤪) But more to the point: please take a moment to subscribe to the newsletter on Substack and the podcast on Apple or Spotify.
This month I wrote about why decentralized finance is a normal accident waiting to happen. I argued that the collapse we are currently witnessing in DeFi is an indictment of a system that treats the dynamic interaction of leverage and rigidity as features to be celebrated, rather than bugs to be avoided… or, ya know, regulated.
In the piece, I drew upon the writing and thinking of Hilary Allen, a law professor at American University and an expert in financial stability. Good news! Hilary agreed to come on the podcast to talk about all things DeFi.
Now, finance is … complicated. I was intimidated to write about it. But don’t let that deter you from listening to this episode — Allen is an incredible explainer of how complex dynamics within the financial system interact. In our conversation, we discussed:
How ‘DeFi’ — despite having ‘decentralization right there in the name — isn’t actually decentralized. (For early Untangled readers and listeners — and here, I’m mostly referring to my dad and my sister — this won’t be surprising.)
How transparent on-chain data isn’t terribly useful when systems are complex. Ah, yes, remember the limits of transparency?
How Hilary would regulate DeFi if given a blank sheet of paper.
If you’re thinking to yourself, “eh, why do I have to care about DeFi?” Hilary and I also talk about how a future collapse of DeFi could impact all of us. Listen to the end to hear how! It’s…not great.
You can find more from Hilary on Twitter.
As always, if you like the podcast, please review it, rate it, and share it. Make it go to the moon!
Until next time,
Charley
Credits:
Track: The Perpetual Ticking of Time — Artificial.Music [Audio Library Release]
Music provided by Audio Library Plus
🙈How a future collapse of DeFi could impact all of us.