Economy
POMPLIANO: Robinhood Retail Trade Freeze is “Marketing Campaign for the Decentralized Financial System”
“The impact is essentially we’re going to have a great exit …”
As small retail investors seem keen on leaving the Robinhood trading application in wake of the company’s decision to halt trading in shares of Gamestop, AMC and others – a move which sparked the vocal dissatisfaction of some big names in social media influence – Anthony Pompliano, co-founder and partner at Morgan Creek Digital Assets and social media influencer in his own right, told CNBC Friday morning that those who now feel betrayed by Robinhood are likely find a home in the decentralized finance space.
According to Pompliano, the executive decision by Robinhood to halt retail traders from buying certain stocks was a “marketing campaign” for the decentralized financial system
“I think basically what we are watching is another marketing campaign,” Pompliano told CNBC’s Squawk Box.
“Last year we watched the Federal Reserve and elected officials run a marketing campaign around the debasement of the dollar. Today and yesterday what we basically watched was a marketing campaign for the decentralized financial system.”
According to Pompliano, who hosts a popular Bitcoin focused podcast, the move by Robinhood to halt trading hardened the retail trader’s already firmly held belief that “the little guy constantly has the decked stacked against them.”
He went on:
“The impact is essentially we’re going to have a great exit and people are going to realize that no matter how hard they try, no matter how loud they are online or on social media, they don’t have a voice and the system is stacked against them. So they’re going to exit that system and they’re eventually going to find a home in the decentralized digital financial system where there is no one person or group that controls these protocols, there’s nobody who can stack the deck against them.”
The decentralized financial system referred to by Pompliano is the recreation of traditional financial instruments in a decentralized architecture. One can think of Bitcoin as a decentralized store of value in which no one person controls the protocol managing the monetary course of the system.
Programatic blockchain platforms such as Ethereum have a more versatile way of recreating traditional financial instruments. For example, the algorithmic, autonomous interest rate protocol called Compound, built on the Ethereum blockchain, is a version of a money market fund, letting users earn interest.
“The goal of DeFi is to reconstruct the banking system for the whole world in this open, permissionless way,” Alex Pack, managing partner at Dragonfly Capital, explains.
Analysts point to the “Total Value Locked” (TVL) metric when measuring the growth of the decentralized finance (De-Fi) market. TVL is the dollar value of all crypto tokens locked within a smart contract running a decentralized finance contract.
According to data from CoinGecko, there is currently $35,207,288,566 locked in the top 100 largest De-Fi projects.
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