21’s View: Code is regulation, however human oversight is important.
“I imagine in decentralization, however we’ve to acknowledge that people are nonetheless a part of the equation. Sensible contracts don’t exist in a vacuum–builders construct them, and customers work together with them. We have to discover a steadiness between automation and accountability.”
He identified that true decentralization was meant to convey steadiness again to a system individuals not trusted. But when DeFi fully removes human oversight, are we actually reaching steadiness — or simply shifting energy differently?
Glenn’s View: Code will not be regulation — authorized frameworks nonetheless apply.
“Ideally, we’d love for DeFi to be ruled purely by sensible contracts, however in actuality, governments don’t acknowledge code because the regulation. When issues go unsuitable, it’s not the sensible contract that determines legality — it’s the real-world authorized system.”
We pointed to the Mango Markets exploit, the place an attacker manipulated a protocol’s value oracle to empty over $100 million, claiming it was a “worthwhile buying and selling technique.” But, authorized authorities noticed it as market manipulation, and the attacker now faces costs.
The takeaway?
Whereas code is regulation is likely to be a guideline in DeFi, it doesn’t essentially align with how jurisdictions implement laws.
