Budding Decentralized Finance Industry Comes With Risks

By Ali Abugheida (August 21, 2020, 6:06 PM EDT) -- The sudden rise of Compound Labs Inc.'s COMP governance token in recent months pushed decentralized finance into the headlines, raising the profile of blockchain-based finance systems to a more mainstream audience.[1]

This article provides a short primer on decentralized finance and discusses some of the key legal risks facing the industry.

What is decentralized finance?

Decentralized finance is a catchall term often used to refer to the creation of alternative finance systems built on blockchain technology. They are decentralized, transparent and accessible to anyone in the world with an internet connection.

Compound is one example of a decentralized finance protocol built on...

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