Thursday, November 19, 2020

So Defi works

 As near as I can tell. It is automated discovery of arbitrage, good for them. Flash loans are great, and make variants in which the lender get a cut of the action and shares transaction fees. Contracts close properly. And another version of the contract language has arrived.

All of this is money neutral, as  Andolfatto implies. I can take the code, run a bank using dollars. I could take the language and write a Swift system, which is itself nothing but a proven set of network contracts. What is to prevent JP Morgan from hiring a bunch of geeks to write an automated investment system, just hit the switch, and see what happens.

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