SpyMasterTrades on Nostr: The Lightning Network and other L2 protocols are essentially analogs of financial ...

The Lightning Network and other L2 protocols are essentially analogs of financial derivatives in the #tradFi space, except they're far more efficient and resilient to liquidity crises by design.

Traditional financial institutions have always struggled to measure counterparty risk. Corruptible credit rating agencies, on which traditional financial firms rely, are a fallible means to measure counterparty risk.

De-fi protocols are public, transparent, auditable, and trustless. In a trustless system, there need not be a dependence on credit rating agencies to measure counterparty risk. As such, de-fi protocols introduce a more efficient financial infrastructure.

In the years and decades ahead, decentralized finance is going to outright replace #tradFi. Those who try to stop it will be faced with trying to stop the wheels of human evolution from turning.