The Single Greatest Attack on Decentralized Finance to Date

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Very not often can we replace the title of this part…

However we did so at this time, as a result of this story ought to take the lead over all others (and positively doesn’t match the title of “That is cool”).

Alright, let’s rip the band assist off:

Yesterday, the SEC knowledgeable Uniswap that it intends to convey an enforcement motion in opposition to the corporate.

Which can find yourself being the best strain take a look at ever made on the decentralized financial system — however will inevitably finish in failure for the SEC and (sadly) for the US as an entire.

Trigger right here’s the factor…

There’s “Uniswap, the decentralized buying and selling platform” — the place customers can commerce/lend between themselves with out the necessity for a center man.

And there’s “Uniswap, the open protocol” — the coded rule set that powers buying and selling (which anybody can construct on prime of).

Which sounds complicated…

However simply check out what you’re doing proper now (studying electronic mail) — it’s just about the identical factor, however we’re buying and selling data as a substitute of crypto…

There’s “Electronic mail, the platform.”

Say you’re studying this on Gmail — what would occur if the SEC had been to sue Google into oblivion, taking Gmail with it?

Would that be the top of electronic mail? Hell no! You’d simply bounce to Apple Mail, or Outlook, or Proton Mail, or one of many lots of of different platforms that use:

“Electronic mail, the protocol.”

Aka: the Easy Mail Switch Protocol (SMTP) — a protocol which is open (aka: owned by NO ONE).

And similar to SMTP, Uniswap’s open protocol isn’t owned by them — they merely plug in to it, alongside a variety of different decentralized trade platforms (the identical method electronic mail platforms plug into SMTP).

Right here’s why the SEC’s failure is inevitable:

Certain, the Fee could possibly rinse Uniswap (the platform) of some million/billion in settlement charges, and parade it round as a win…however in the case of suing an open protocol, effectively — they’ll’t. It’s a factor, not an entity.

(It’d be like making an attempt to sue your mattress stand after you stubbed your toe on it for the hundredth time).

And positive, they’ll order Uniswap to close the protocol down all they need…however once more — it ain’t going to work! As a result of Uniswap (the corporate) doesn’t personal/management the protocol anymore.

Now, right here’s the place the US goes to get stiffed:

If the SEC succeeds in shuttering the Uniswap platform, it would solely end in different (offshore) platforms popping as much as change it.

Pushing Violently shoving innovation and development in a foreign country within the course of.

@GaryGensler: two emphatic thumbs down.