The Single Greatest Attack on Decentralized Finance to Date

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Very hardly ever will we replace the title of this part…

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

Alright, let’s rip the band help off:

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

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

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 e-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 tip of e-mail? Hell no! You’d simply bounce to Apple Mail, or Outlook, or Proton Mail, or one of many tons 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 identical to SMTP, Uniswap’s open protocol isn’t owned by them — they merely plug in to it, alongside a spread of different decentralized change platforms (the identical means e-mail platforms plug into SMTP).

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

Positive, 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, nicely — they’ll’t. It’s a factor, not an entity.

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

And certain, 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 should solely lead to different (offshore) platforms popping as much as substitute it.

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

@GaryGensler: two emphatic thumbs down.