Decentralized Finance (DeFi) refers to the products that function on public blockchains and their markets. What “public” means in this context is that the system is controlled by the users of a blockchain and not by a singular private entity. Since 2020, DeFi markets have witnessed substantial growth that is directly linked to the innovation possibilities offered by this technology. But, this growth did not go unnoticed by world leaders, and the menace of more tax lawmakers intervention is becoming a reality.
How Could New Laws Affect the Ecosystem?Logic dictates that, in a system whose main allure is no third-party control, heavier regulations may cause wide disappointment and an understandable massive user dropout rate. Even though this might be the case, there's a possibility that decentralized finance could evolve into a different kind of animal or that users could workaround the barriers that may come, as they did in China, with offshore exchanges and peer-to-peer trading. But the second option might be like putting a band-aid on a fractured leg. The main burden still lays on lawmakers since to really shut down a DeFi company, they will need to extinguish Ethereum altogether.
Even though governments are coming in hard, the battle in Congress is not one-sided. DeFi-educated candidates are willing to fight the pro-crypto battle in the legal arena. This is the case of Oregon’s Democrat Congress candidate Matt West. West has a Ph.D. in chemical engineering, and he moonlights as a DeFi-developer for Intel. The candidate advocates for a more realistic approach to crypto legislation and believes that the latest actions by lawmakers are “out of touch and destructive.” He plans to show the US Government that crypto matters.