I agree with you twice! First, of course, there is risk in every investment opportunity. It would be nice to know the future, of course, but risk is inherent. Second, great insight regarding the empowerment dynamic that flash loans can offer. Seems like this not only helps potential investors but also can help networks become more secure if I’m understanding the research in Why Stake When You Can Borrow correctly.
Back to this paper though! I guess what I was getting at originally in my series of questions is how well does this paper help us understand the risk of a decentralized financial crisis? It looks like they ran a simulation on a known problem that has been fixed (and please correct me if that is an oversimplification!). Demonstrating this risk is valuable but isn’t it a little too limited in scope? I might not be understanding the theoretical position they’re developing here well enough to see it but I’m left wondering if this paper can help us look beyond Maker specifically and help us better identify and evaluate potential decentralized financial crisis red flags in the future? Maybe that’s not what this paper is set up to do and it’s just something I want it to be doing. Am I being too unfair here? Anyone else left wondering the same question?