Decentralized finance protocols will prevent a repeat of the GameStop (GME) episode. This is the view put forward by billionaire Mark Cuban in a thread.
The problem: Brokers trade at the speed of light, but settle trades over 2+ days. This can happen again. Co-ordinated traders can hunt better capitalized platforms and make $gme style buys. Solution? Blockchain. @InjectiveLabs @mirror_protocol othershttps://t.co/F1KF5DduUY
— Mark Cuban (@mcuban) February 18, 2021
The former Bitcoin critic noted that traders trade at the speed of light, while settlements for executed trades take more than two days. The Reddit-Wall Street showdown over GameStop stock exposed bottlenecks in the infrastructure.
Cuban proposed tackling high-frequency algorithms and banning positions held for less than a minute. He argues that the stock market was created to attract capital and confer ownership, not to let robots prey on investors.
The billionaire stressed that the industry will benefit from stress tests and monitoring of brokers’ available liquidity. Clients of platforms such as Robinhood will not be exposed to the risk of broker-imposed restrictions.
In conclusion, the billionaire suggested that in the GameStop dispute the Securities and Exchange Commission would take a stance against investors. He urged regulators to allow the use of juries in lawsuits filed.
During the hearings, Robinhood co-founder and chief executive Vlad Tenev apologized for imposing a temporary ban on buying of several securities.
At the end of January, the service paused trading of several assets amid a GameStop stock rally. The move drew ire from investors and authorities.
Earlier in February, Cuban predicted that the segments of decentralized finance and non-fungible tokens would become the main driver of the crypto market over the next decade.
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