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Money Reimagined: Can DeFi Stay Decentralized?


Uniswap’s move to restrict investor access to certain tokens, apparently from regulatory pressure, raises questions about DeFi’s decentralization.
Uniswap is a decentralized exchange. Unlike centralized crypto exchanges and wallets, it takes no custody of customer assets. In theory, it’s governed by a decentralized community, whose members use its native token, UNI (+5.04%), to coordinate voting on financial conditions and other elements of the system.
But last week Uniswap Labs, the company that launched the protocol, announced it would limit trading in certain financial assets on its site. Citing “a shifting regulatory landscape,” the company restricted access to tokens that are synthetically linked to the value of stocks and other traditional financial instruments. The move came after U.S. Securities and Exchange Commission Chairman Gary Gensler warned that stablecoin tokens pegged to traditional securities may themselves constitute securities that are subject to its oversight.
With this one outcome, DeFi is suddenly looking a bit less decentralized.
Christensen explained on our podcast recently, the founders quickly learned it was impossible to launch an entirely decentralized platform from the start. The decision-making of the foundation was needed for the system to run effectively at first, but the founders worked to build out the participation, liquidity and a structure that would eventually allow the protocol to run by itself.

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