stellaachenbach
@stellaachenbach
When it comes to the benefits I see the enhanced liqudity and accessibility (fractional ownership). I also see the opportunity for facilitating instant settlements and of course new financial instruments and methods (e.g., tokenized deposits that yield interest while functioning as payment). While I see all of the above the problem is that in my opinion the drawbacks (for now ) outweigh the benefits 🥺! On the drawbacks and risks side we have the reality that programmable tokens allow for mass redemption (aka. automated bank runs) those stress markets and accelerate a crisis, ending up in volatility! Since traditional markets don’t operate the same hours, sell-offs can cause liquidity mismatches. Next we enter all the regulatory minefields that make operational frameworks most of the time feel paralyzed . There are no consistent rules for tokenized equity-money hybrids across borders while tokens operate on a global level. Not to mention educational user gaps for one on how to use basic web3 infrastructure but also when it comes to financial literacy generally. While I love the democratization that tokenization delivered to us, it introduces interconnected risks—particularly programmability-driven instability and regulatory gaps. I believe the success of all of this hinges on robust custody solutions, cross-border regulatory alignment, and stress-resistant platform plus protocol designs. Without these, I am worried that conflation could amplify systemic shocks rather than mitigate them.
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Ξ2T 🏰
@earth2travis
Are these drawbacks temporary?
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