WallStreetBets: GME case puts DeFi in the spotlight

English Feb 3, 2021

Right now, many devotees of decentralized finance are taking the opportunity to say "I told you so". The traditional, completely skewed, financial system appears to be betraying the young traders who have placed their trust in it.

It all started when a group of reddit /wallstreetbets, whose users largely use the Robinhood platform to operate, were simply disabled from some of their functions. This is not a common instability, but a decision by the broker to block only purchases and allow sales, in an attempt to lower the share prices.

The broker's poor unilateral decisions did not stop there. The platform imposed a limit on purchases in certain stocks, something that could never happen in the world of decentralized finance where the free market reigns.

Even before Robinhood cut off access to certain assets, users complained throughout the week about irregular service to several brokerages - which led some to point out that a stock like Uniswap cannot be disabled and does not serve any particular user.

The founder of the app Robinhood, said that the decisions were imposed by the high demand that generated the need to increase the margins. However, the internet suspects that the reason is different, since 40% of Robinhood's income comes precisely from the company that suffered the most losses from the GME trades.

Regardless of the cause, whether due to irregularities or compliance, we can see that the systems of traditional markets are completely out of date. Such structural problems will only be resolved with the progress and the adoption of decentralized finance.


Morel Hernandes

Writer passionate about politics, economics, blockchain and crypto-currencies.