Non-custodial DeFi systems and Economic Risk

While DeFi shows tremendous hope for the formation of a new financial system that can be independent of institutional trust, many of the most popular DeFi systems that exist today still rely on the very same institutions they are aiming to replace. An example of this is using a partner bank in the traditional financial system to secure collateral assets off-chain. Centre; the brainchild of Coinbase and Circle does this by placing a US dollar into trusted bank accounts every time a USDC is minted. Moving forward, however, as these new crypto-economic systems mature, they will…