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21’s View: Code is law, but human oversight is necessary.
“I believe in decentralization, but we have to acknowledge that humans are still part of the equation. Smart contracts don’t exist in a vacuum–developers build them, and users interact with them. We need to find a balance between automation and accountability.”
He pointed out that true decentralization was meant to bring balance back to a system people no longer trusted. But if DeFi completely removes human oversight, are we really achieving balance — or just shifting power in a different way?
Glenn’s View: Code is not law — legal frameworks still apply.
“Ideally, we’d love for DeFi to be governed purely by smart contracts, but in reality, governments don’t recognize code as the law. When things go wrong, it’s not the smart contract that determines legality — it’s the real-world legal system.”
We pointed to the Mango Markets exploit, where an attacker manipulated a protocol’s price oracle to drain over $100 million, claiming it was a “profitable trading strategy.” Yet, legal authorities saw it as market manipulation, and the attacker now faces charges.
The takeaway?
While code is law might be a guiding principle in DeFi, it doesn’t necessarily align with how jurisdictions enforce regulations.
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