I have some seemingly dumb questions here - but I think the same would be asked by newbie-ish ppl from time to time, so I’ll be the one asking.
Would such high dependence and composability risks trigger a blockchain equivalent subprime mortgage crisis?
You summarized the composability risks well: flash loans, malicious updates to DAO/protocol contracts, algorithmic stablecoin, protocols for loanable funds, wrapped coins and tokens, bridges between chains…
And yet we already have Black Thursday for MakerDAO - hell, we even have an insurance dapp 3F Mutual - Collective Insurance Against MakerDAO Risks - Defi Pulse Blog to hedge against such liquidation risks…
This is just from one dapp, and you already described market(oracle) manipulation well, that’s between (at least) two dapps.
I wonder, how would you personally think about this?
Would such a chain reaction/domino effect happen in the near future cause defi legos are too reliant on each other?
Apart from that, what can we do (apart from urging everyone to do their f***ing audit and don’t label your product as beta to prevent public backlash from future attacks), before thing’s too late? (that is, it’d be very appreciated if you can further clairfy section 6.1.)
Thank you for your hardwork, It filled in many knowledge gaps in my mid - I personally learned a lot from it, and I believe others will, too!