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Are all the users programmers, are they fluent with the language and frameworks? Could they even read the code if they wanted to?

Even if they could read the code and understand that there is a mechanism in place that allows designated humans to pause redemption, the code says nothing about when and how this mechanism should be used.

The user might reasonably expect such a mechanism would only be used in an emergency, like the network has been hacked, or there is a bug. They might expect that it would never be used for the financial advantage of the network operators simply because the coin has depegged and redemption is acting as expected.



Users that don't understand these things shouldn't jump into the market and buy the hottest thing.

They should probably stick to long lasting products like BTC, ETH, or XMR.

> The user might reasonably expect such a mechanism would only be used in an emergency

A de-peg event is an emergency if there's not enough real value to back it.

The USD was depegged from gold in the seventies for very similar reasons.

In both cases the printer got ahead of the backing.

Today we use a currency that survived a de-peg event due to military backing.


> Are all the users programmers, are they fluent with the language

That's a fair criticism, but isn't it the status quo in the industry in general? Surely most people with stakes in the markets don't truly understand the regulations or the innate dynamics of them.


You've neatly captured why TradFi regulation is a thing.




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