Mark Cuban says ‘banks should be scared’ of DeFi (via CNBCMakeIt)
Mark Cuban, owner of the Dallas Mavericks looks on prior to the start of the game against the New York Knicks at Madison Square Garden on November 14, 2019 in New York City.Billionaire investor Mark Cuban is very bullish on the future of DeFi, or decentralized finance, and DAOs, or decentralized automated organizations.on Sunday. For one, "banks should be scared," he wrote.with cryptocurrency, while DAOs can govern and oversee DeFi applications and other projects.
DAOs are similar to traditional corporations or organizations, but instead, control within DAOs is democratized. Rather than having one centralized leader, DAOs have members that vote on decisions and rules, which are then coded into smart contracts on the blockchain. For example, through DeFi lending, users can loan out cryptocurrency like a traditional bank does with fiat currency and earn interest as a lender. DeFi lending applications, like Aave, Compound and Maker, are governed by DAOs.
The structure of these decentralized protocols is one of the things that draws Cuban's interest and makes him think that DeFi could be a serious competitor to traditional banks."Aave, like its competitor Compound, looks like a bank. But, it is not. Nowhere close," Cuban said.
"Everything is controlled by smart contracts. It's fully automated. You don't have to get approval from anyone and it takes minutes to take out a loan."
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