Web3 is less centralized in that the user data is exposed and freely available to be composed upon.
For example, when someone makes a deposit (say of ERC20 USDC to earn interest, around 3.0% currently) on https://compound.finance, that data is freely available and the "receipt" becomes another token (the ERC20 USDC cToken). [1]
This token can now be used for other things, on any other protocol, without the involvement of compound itself. For example, there is a "compound" pool on https://curve.fi that allows users to deposit cTokens so that they can earn interest on their stablecoins while also providing liquidity for stablecoin swaps and earning swap fees as well on top. [2] In fact, with this pool, the user can deposit/withdrawal just pure ERC20 USDC instead and curve will deposit/withdrawal that into/from compound on behalf of the user, again, with no involvement of compound at all. (other than interacting with its "immutable" smart contract)
This deposit then gives the user back another ERC20 token "cCrv" that can then be used in other DeFi protocols without the involvement or authorization of curve.
At this point people are talking past each other because "centralization" can be used to refer to many things. The author's analogy is arguing about the direction/standardization of the technology, and the proponents of the technology are talking about the user data.
If I buy a house, I can take a credit on that house.
If I bought some stock, banks will let me take a loan on them afaik.
I can also borrow some money and choose something expensive that I own for a collateral.
Maybe crypto makes the last one easier, but then it will lead to a lot of fraud, because veryifing that the item I set as collateral is the difficult and expensive part.
Sure, but that information today is gatekept quite well and impossible for you or me to pull or integrate without partnerships or paying up heavily. For example, plaid is a company worth 13.4b where largely all they do is log in to your financial accounts on behalf of another (usually financial) institution to scrape your account data. If you try doing that yourself, you will be blocked by the risk systems of the various banks.
Other companies like mint and byallaccounts largely did the same thing and were aquired at $170 per account and $33 per account respectively. So obviously someone is making money on keeping your data gatekept.
No they don't gatekeep the information, your information is always available to you.
Maybe they don't offer the information in the specific way that you want, but that can also happen in web3(Propertery API, OAUTH2 which means you have to have static ip server for authentification,etc.).
You pay for the convenience of having your data aggregated in the specified format.
That aside, banks in the EU are forced to offer api services, as specified in the PSD2 standard.
I just don't see how doing everything in a web3 solves anything better than regulations.
> I just don't see how doing everything in a web3 solves anything better than regulations.
Maybe - but then, good luck getting every single country in the world, to agree on identical, completely open regulations way, way more advanced than PSD2. This is what ""web3"" (or more accurately, open and composable finance primitives such as Ethereum/alt-L1s and the surrounding ecosystem) achieves.
Look at it from the developer side, you (as a dev) cannot offer anything of you what you mentioned without government approval, but you can deploy a new yearn strategy to offer what GP mentioned. We can argue if that's good or bad, but for sure the latter is more decentralized since it doesn't require approval from a gatekeeper.
I would say that depends on the country you live in, but essentially you are saying web3 somehow doesn't get regulated and therefore is better.
The reason you wouldn't be able to simply start a website offering people loans would be because of laws, I see no argument that if you somehow use a different technology it is suddenly legal.
I explicitly said I'm not sure it's better or worse (largely depends in which country you're living I guess), but it's undeniably more decentralized than the current situation.
ahh, ok, then I can agree to some extent, altough I think the problem with product visibility and chain acceptance will make it more centralized in the long term.
For example, when someone makes a deposit (say of ERC20 USDC to earn interest, around 3.0% currently) on https://compound.finance, that data is freely available and the "receipt" becomes another token (the ERC20 USDC cToken). [1]
This token can now be used for other things, on any other protocol, without the involvement of compound itself. For example, there is a "compound" pool on https://curve.fi that allows users to deposit cTokens so that they can earn interest on their stablecoins while also providing liquidity for stablecoin swaps and earning swap fees as well on top. [2] In fact, with this pool, the user can deposit/withdrawal just pure ERC20 USDC instead and curve will deposit/withdrawal that into/from compound on behalf of the user, again, with no involvement of compound at all. (other than interacting with its "immutable" smart contract)
This deposit then gives the user back another ERC20 token "cCrv" that can then be used in other DeFi protocols without the involvement or authorization of curve.
At this point people are talking past each other because "centralization" can be used to refer to many things. The author's analogy is arguing about the direction/standardization of the technology, and the proponents of the technology are talking about the user data.
[1] https://compound.finance/docs/ctokens
[2] https://curve.fi/compound