Regulation

Note: Data in this section last updated March 13th, 2022

Risks such as these have made DeFi a target for regulators. SEC Chief Gary Gensler labeled the space as the “wild west” and Elizabeth Warren recently called it “one of the shadiest parts of the crypto world”.

Given the growing sentiment of the establishment, it’s all but certain that regulation is inevitable., but it’s not entirely clear how that would work or if it’s even possible.

This could greatly impact centralized systems such as Coinbase or Tether, but it’s not clear how regulation would work for the broader ecosystem or if it’s even possible.

After all, blockchains are decentralized systems -- that is, they’re run by thousands to tens of thousands of computers across the world – so there’s no central point authorities can use to enforce rules or shut them down.

The perfect example of this is China’s “Bitcoin ban”, which sounded scary but had little effect on the space as most local traders simply switched to Uniswap, a decentralized exchanged, and continued business as usual.