DeFi platforms have to navigate a growing multitude of risks.
Will this address default? Are we at risk of running out of liquidity? Is the system over-leveraged? Are bad actors able to flash loan our crypto away?
Would a bank consider making a loan to someone without knowing something about them? Of course not, we aren’t banks.
If you’re a crypto lender, how do you know about someone’s crypto assets, their cash flow, and their credit history?
Your app is built on DeFi, so it’s only as healthy as the platforms that are foundational to your business. As they change out from under you, you can fall behind, sending your users into unknown waters.
Would a traditional high-net-worth individual consider investing with a company they knew nothing about? Of course not. They’d check the D&B rating, at the very least.
If you’re a crypto whale (or even a crypto tuna), where can you find data about exchanges or OTC desks? How do you know if they have a healthy balance sheet? Until now, you couldn’t.
You trust that your crypto portfolio is made of successful companies, high on reliability, low on risky leverage. That isn’t necessarily true.
Aggregates, solvency, and balance sheet numbers are based on unvalidated assumptions, and consumed by institutions, setting asset prices and facilitating liquidity. Leverage isn’t even taken into account, putting your portfolio at risk.