September 30, 2022
Chicago 12, Melborne City, USA
Tech

The risks and rewards of paying off student debt on the blockchain

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“Even evaluating the stability and risk of smart contracts really depends on the end user, the developer and the borrower or lender,” said Reed Cumming, vice president and general manager of Compound. “I think we’re still in a situation where there’s a lot of room for improvement.”

Anyone who knows your wallet address can see how much you have borrowed.

DeFi platforms also give borrowers little privacy, meaning anyone who knows your wallet address will see how much you borrowed and when.

Crypto skeptic Molly White says it divides users into three camps: those who protect their privacy at the expense of being able to use the major crypto platforms, those who leave some privacy to use them, and those whose identities and crypto wallets are publicly linked. .

As the platform’s choice falls into liquidity versus privacy, many of the perceived benefits of decentralization তা privacy, anonymity, and independence from corporations নয় no longer apply. And managing these risks requires technical skills that most borrowers do not have.

On the one hand, White says, some believe that these platforms are conducting financial transactions, once the domain of experts, available to anyone: “But on the other hand, people are stumbling to make risky decisions that they don’t know about will be able to do it responsibly.”

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Kim remains optimistic. He compared the situation to the early days of the Internet and said that despite the risks, DeFi has the potential to become mainstream. “I think DeFi will equate with centralized money… just because of its transparency and openness,” he said. “Ecosystems need to mature, but I think that’s the case with any emerging technology.”

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