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Monero and the DeFi trap

LiberLion
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Oct 15 13:48
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#443
I have been anticipating for some time that Monero may suffer more from its own ambition than from external risks.

Let me explain.

The co-founder of THORChain has proposed integrating Monero directly into its DEX for native swaps. It sounds tempting — more freedom, more liquidity — but it’s also a dangerous turning point. “Native interoperability” means you could swap XMR ↔ BTC or ETH without custodians or wrapped tokens. It sounds ideal: privacy plus full decentralization. But the devil hides in both the technical and philosophical layers.

THORChain plans to use a new distributed signature scheme (TSS) with Silence Labs, based on Schnorr. The goal is to avoid the same security flaws that doomed the 2023 attempt.

The proposal includes a $200k liquidity pool, enabling swaps over $500k. On paper, it looks like the bridge Monero needed to reach the wider crypto ecosystem.

But here’s the issue: that bridge connects two worlds that were deliberately kept apart. Monero wasn’t born to play in the DeFi casino — it was born to be private money.

When Monero enters a DEX filled with swaps, pools, and yield farming, it absorbs the logic of financial speculation. It stops being just a medium of exchange and starts acting like a financial asset.

That shift may attract traders but distances Monero from its cypherpunk essence: autonomy, anonymity, and everyday usability without intermediaries or risk incentives. It also creates dependency on another blockchain’s infrastructure and security. If THORChain breaks, Monero takes collateral damage — even if its base protocol remains pure.

More interoperability means more exposure, complexity, and regulatory pressure. What was once a refuge turns into shared ground.

Connecting Monero to DeFi may sound like progress — but it could mark the start of its domestication.

Privacy doesn’t need liquidity. It needs independence.
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superduper Donor - Supporter Verified
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Oct 26 23:00
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#488
I agree, monero does not need any more progress other than more development.
the thing that drives such ideas is the dream that monero needs to replace bitcoin, but what people don't understand is that monero has already replaced bitcoin, and now bitcoin is nothing but a moonboi's casino coin and if we push for it to replace moonboi's casino coin we make monero another casino coin and casino coins die.
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edisondotme Donor - Supporter
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Oct 27 01:43
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#489
Reply to post #443
The first half of your post were all reasons why this was a *good* thing, but your argument why for good thing is actually bad thing is because thorchain makes good thing *too* good at being good thing and that is bad thing.

"it absorbs the logic of financial speculation. It stops being just a medium of exchange and starts acting like a financial asset."

So your argument here is, XMR being easily swappable for other currencies quickly is bad because it enables XMR to participate in speculative money market trading?

I don't understand the argument why these are bad things. I mean, I get it that XMR is supposed to be peer to peer digital cash, but isn't it good for adoption to have easier on ramps like this? Yield farming sounds stupid and I wouldn't care to participate because I don't care about any other coin except Monero, but is that really worth throwing away all the other benefits?

This is not an attack, I don't know about Thorchain and would never use it because I'd rather earn XMR through exchange of goods and services and I don't give a shit about moonboy stuff, but isn't anything that is good for adoption, good? Genuinely trying to understand.
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superduper Donor - Supporter Verified
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Oct 31 00:13
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#512
Reply to post #489
The idea I think is once something is possible, it will eventully become real.
Once fast trading becomes real, moonbois will hijack the space lowering the cypherpunk voice which is what's driving the project, and eventually the moonboy will seek any means to make his coins worth more, was it goverment regulations or compliance. Everything that's already happening to bitcoin.
Trading also bring another hidden layer very few people think about, bots. Bot don't care what the price is doing or is it a good project or not, or what's the real value of it, bot buy and sell to gain fraction of a penny thousand of times a minute creating a fake (not organic) demand and supply.
I think Monero is good as long as we keep it out of the moonboy's hands and we keep the anti-regulatory spirit, it's value will keep providing and proving.
slow trading (p2p) is good and better, it's organic and real.
idk this is my take
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