Everything on Technology/Risk Management

DeFi lending protocols should focus on trustless execution rather than attempting to create risk-free loans. The market risk of a borrower defaulting is inherent to any loan, and undercollateralized loans can exist on-chain if the risk is underwritten in the open.

Impact: This shift in framing allows for the creation of more sophisticated financial products, such as undercollateralized loans, within the DeFi ecosystem.

— from The Future of Finance: Disintermediating Banking with Morpho · web3 with a16z crypto· Apr 08, 2026