Michael Moro, CEO of trading firm Genesis, said that in his opinion, decentralized finance (defi) space is still very risky for the organization. Consumer funds are at risk. This is why the space is still dominated by retail investors, who have more risk management policies.
Defi error scares the organization away
Michael Morrow, CEO of Genesis, one of the largest cryptocurrency trading firms in space, has given his views on why Duffy has failed to persuade companies to invest in these protocols. From his point of view, the space is still very risky and this is evidenced by the mistakes of some recent high-profile companies. In an interview with Insider, Moro said:
The errors and mistakes you see must be embarrassing for organizations to do something in shape on a particular platform.
Hedge funds and proprietary trading firms would be keen to use some of these protocols to their advantage, but these firms are not willing to make big mistakes that could cost them millions of dollars. Moro stressed that retail investors are at risk, noting:
The sad thing is, for now, because it’s the consumer, it’s the retail guys who are wandering around in Defy today, they’re going to lose money.
Another day, another hack or exploit
The decentralized finance sector is undoubtedly the most exploited and hacked in the cryptocurrency industry. This is because it is based on smart contracts that can show vulnerabilities that cannot always be identified by the auditing company. Just last week, Compound, one of Ethereum’s top nding and orrow protocols, experienced a bug in a smart deal that left millions of dollars for platform users.
The bug was caused by an upgrade of the platform to an important deal, which rewards users in the form of native tokens, comp. This upgrade was performed by community members who wrote the changes to the agreement and also reviewed its code. To Moro, this is one of the biggest dangers in the sector. He finished:
There is a trial and error component to define, where the error will cost one hundred million plus. I don’t think our observers have a strong enough ecosystem. I think you still trust someone to audit the code.
What do you think of Genesis CEO’s opinion on why organizations didn’t accept DFI? Tell us in the comments section below.
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