DeFi Not Decentralized Debate Goes Viral as Industry Experts Weigh-in
Many of the DeFi and crypto industry’s top influencers and personalities have waded in with their take on the highly charged subject.
The ethos behind DeFi is largely to remove the controlling element of a CEO, or board of directors, that dictate the movements of centralized finance such as crypto exchanges and banks. From a technical standpoint, however, some are of the opinion that it can never be truly ‘decentralized’.
Using the principle that Ethereum and DeFi protocols are not decentralized because of the web servers many of them are based on, and who controls them, Bitcoin advocate Anthony Pompliano kicked off the whole thing with this incendiary tweet;
Jeff Bezos could shut down most of these Ethereum-based “DeFi” apps by simply shutting off AWS.
You’re not decentralized if you just spin up servers with Uncle Jeff!
— Pomp 🌪 (@APompliano) October 7, 2020
Does Amazon Own The Web?
Morgan Creek Digital co-founder, ‘Pomp’, as he has become known in crypto circles, asserts that Amazon boss Jeff Bezos could just shut down the AWS servers hosting a large number of Ethereum based DeFi platforms.
A ZDnet report confirms that Amazon Web Services does have the largest slice of the cloud services market in 2020.
He posed the question as to how many DeFi protocols are truly decentralized based on this premise. Industry expert Camila Russo was one of the first to respond after looking into Ethereum node statistics and reporting that 70% of ETH nodes are hosted, but they may not all be using the same service.
She added that Amazon servers host 37% of the total, to which Pomp replied changing tack asking about DeFi protocol smart contracts with centralized front ends. ShapeShift CEO Erik Voorhees waded in pointing out that;
“Most Bitcoin nodes also run on AWS … Because most servers of all kinds run on AWS.”
DeFi Crypto Tribalism Rulez
What followed was an intense discussion over the virtues of Ethereum nodes over Bitcoin nodes with no clear ‘winners’ for their chosen digital asset.
When Uniswap was mentioned, founder Hayden Adams chimed in stating that it is an immutable smart contract on Ethereum which he has no ability to turn off.
One of the more amusing responses came from Compound Finance founder Robert Leshner who stated;
“When a #Bitcoin influencer reveals their deep ignorance of how blockchains, smart contracts, and the #DeFi stack works *for the first time*, we should educate them and welcome them with open arms.”
With no clear direction, the debate soon spiraled into the cesspit of crypto tribalism that has plagued this industry ever since the second coin after Bitcoin was created.
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