Notes from my diary, Saturday (14/12/24):

We do not talk enough about P2P (or how terribly it failed)

Crypto promised a world where anyone could borrow and lend without banks.

No middlemen. No gatekeepers.
Just smart contracts matching lenders with borrowers.

Instead, we got:
a) Overcollateralized loans.
Borrowing $100 required posting $150 as collateral.
Who needs a loan when they already have more money?

b) Whales dominating liquidity.
Most lending pools relying on a few big players, not actual peer-to-peer interactions.

c) MEV bots skimming profits.
Arbitrage bots extracting value before everyday users even get a fair trade.

P2P finance failed because it never actually became peer-to-peer.

The solution here is marter undercollateralized lending.

That paired with reputation-based credit will enable true decentralized risk-sharing.

Until then DeFi is just repackaging banks in code. We cannot get away with it.

Ps: A small leather journal with a fountain pen every weekend will do you wonders.