# kaal:claim:3782216-036

**Claim.** The inability of anonymous participants to trust one another is crippling the DeFi market and forces decentralized markets into overcollateralization, giving traditional markets a fundamental advantage.

**Type.** failure  **Support.** argued

**Holds when.**

- current decentralized markets, before decentralized reputation exists

**Source quote.**

> the inability to trust each other due to the requirements of anonymity is crippling the deFi market. So traditional markets have a fundamental advantage. Decentralized markets are overcollateralized.

**From.** Craig Calcaterra, Wulf A. Kaal, *Decentralized Finance (DeFi)* (2021), Summary

**Cite as.** Craig Calcaterra, Wulf A. Kaal, Decentralized Finance (DeFi) (2021). SSRN: https://ssrn.com/abstract=3782216

**Verify.** sha256 of source PDF `f1739743aa06bbc1641cd65da790d531b69d8628ea3f5cc3fcad1bf5a1242373` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Calcaterra%20and%20Kaal%20-%202021%20-%20Decentralized%20Finance%20%28DeFi%29.pdf

**Failure mode.** anonymity driven overcollateralization  (family: liquidity-and-market-structure-failure)

**Topics.** defi, reputation

**Keywords.** defi, overcollateralization, trust, anonymity, liquidity

**Related claims.**

- restated_by: https://wulfkaal.github.io/claims/3949098-001

**Canonical form.** This markdown file is the canonical hashed representation of the claim. Its sha256 is the content hash used for attestation.