Billionaire Mark Cuban Endorses DeFi as the Real RobinHood

Billionaire Mark Cuban has taken a liking to decentralized finance (DeFi). Not only is he actively involved in owning some of these DeFi tokens and testing out the products, like leading lending platform AAVE but he is also continuously endorsing them on Twitter.

On Friday, the Maverick Dallas owner took to Twitter to share that a part of the trading that retail investors are doing on retail broker Robinhood goes to the zero-commission platform itself.

“This is one more way that Wall St takes advantage of the little guy,” said Cuban, one of the investors on Shark Tank.

While in traditional finance the platforms like Robinhood are the ones taking a cut of the retail’s money, the same percentage of APR is paid to the user itself in the world of DeFi. He wrote,

“Imagine if you pooled your crypto and the platform was getting 30% APY and didn't pay all but fees to you? What would happen?”

Robin Hood:
steals from the rich, gives to the poor

Robinhood app:
steals from the poor, gives to the rich

— Norbert Elekes (@NorbertElekes) January 28, 2021

For starters, in traditional finance, no one will allow the retail user to “hold the shares and lend them in YOUR name, so you get the Yield (Yield Farming in stocks!).”

If someone does provide this feature, “one trick that I have been on both sides of is to lend out stock to shorts at a high APY and then call back my shares, which forces the short to cover. Now if WSB did this en masse, it would be the mother of all short squeezes,” said Cuban.

He goes on, the power is in numbers, and what is happening right now in the battle between the retail traders (WallStreetBets) and Wall Street is that the latter “is learning an expensive lesson.” He said,

“Buy and Trade Together can be a whole lot more powerful than old-school buy and hold.”

So, here he suggests small individual traders work together, share information, educate each other, and “use their combined strength to focus on good companies, with strong prospects, the power shifts from wall street to main street.”