The comparision between traditional finance and DeFi using the car loan example really makes it click. The part about MakerDAO and how collateralized borrowing works is key becase it solves the trust problem without needing credit scores or intermediares. What I find interesting is how liquidity provision turns regular users into market makers, something that was only possible for institutions before. The risks are real though, especially smart contract vulnerabilities and liquidation cascades during volatility.
The comparision between traditional finance and DeFi using the car loan example really makes it click. The part about MakerDAO and how collateralized borrowing works is key becase it solves the trust problem without needing credit scores or intermediares. What I find interesting is how liquidity provision turns regular users into market makers, something that was only possible for institutions before. The risks are real though, especially smart contract vulnerabilities and liquidation cascades during volatility.
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