The Evolution of Trust in Decentralized Finance
In the realm of decentralized finance (DeFi), the notion of trust has evolved significantly since the inception of Bitcoin, where the creator Satoshi Nakamoto emphasized anonymity among participants, under the premise that software—not individuals—would uphold the system’s rules.
Decentralized Exchanges and Market Dynamics
Most decentralized exchanges adhere to this principle; however, the fact that a trade can occur in an immutable environment does not imply fairness in the overall market dynamics. A striking example of this is the $110 million incident involving Mango Markets in October 2022.
This incident, while executed per contractual stipulations, was deemed fraudulent by a U.S. jury in April of this year.
The Discrepancy Between Legal and Ethical Standards
This case illuminates the dissonance between legal code and ethical considerations that continue to grow.
