Despite the ongoing push for asset tokenization, some are voicing fears. Libonomy COO Janis Aperjots believes that while eliminating third-parties is a logical frontier for crypto firms, the lack of addressing interoperability might lead to security risks and greater problems.
MakerDAO holders faced the wrath of plunging Bitcoin prices in mid-March when the pioneer digital asset fell over 45 percent over two trading sessions. DAI holders lost over $4 million, and caused MakerDAO to introduce changes to how it’s DAI-backed assets are priced and traded.
Aperjots adds: “It’s amazing that there are projects like these that in the long term help to reduce the volatility of digital assets, but the harsh truth is that right now the security and freedom for players using this solution are endangered.”
Libonomy works on improving and introducing interoperability in the DeFi and crypto market. Aperjots notes the Ethereum smart contract platform does not have inherent security protocols, leading to “a lot of” smart contracts being deployed with security flaws.
He did not single out any project, believes it remains a “major concern.” Another issue, Aperjots believes, stems from the lack of scalability that Ethereum endures currently – meaning the rise of DeFi solely on the protocol would lead to unreasonable fees slower transactions.