One lesson of traditional finance that crypto is learning these days is: “If you’ve got a bazooka, and people know you’ve got it, you may not have to take it out.” For instance:
- There is a small opaque crypto lending platform that is rumored to be in trouble.
- 2. Its depositors want their money back.
- 3. It doesn’t have their money, either because the money is locked up in long-term loans or because it lost the money or
some combinationor otherwise.
- 4. There is a “run on the bank.”
- 5. To solve the problem, the lending platform agrees ...