Comment by saurik

But this IS traditional finance, in a very key sense: the money loaned to 3AC was NOT done using defi. When I have collateral I loan out using actual-defi the liquidation rules are transparent and the holdings are transparent and if something starts crashing I get to cause the liquidation before all of my money just disappears into a black hole of people lying to me. That 3AC then took their traditionally-loaned money and did something dumb with it involving crypto is not an argument that defi is broken but that people shouldn't be using tradfi: what is stupid here was people trusting 3AC instead of using their own tooling (a problem that I fully admit is so endemic in the cryptocurrency industry that I have to CONSTANTLY complain to my own business partners that our using Coinbase Custody to hold any of our currency is flat out embarrassing).