Even DeFi creates gigantic leverage while being "debtless" - the typical usecase for DeFi is just financial leverage:
- have BTC you lock up, get a stablecoins in exchange
- buy volatile crypto with stablecoins
- voila! You're leveraged
You can see this very easily in how the Total Value Locked in various protocols is essentially an index of the price of Bitcoin
Most stablecoins are run by a centralized, trusted third party maintaining a dubious peg to the centralized USD and will probably get taken down by some Soros breaking-the-pound style attack eventually.
But Bitcoin and most other major cryptocurrencies predate stablecoins, and will survive them.
Additionally, most of the collateralized DeFi leverage schemes you reference require over-collateralization. Since no identity makes margin calls impossible, effectively the margin call is done up front as a contingency in the form of over-collateralization.
A debtless, over-collateralized financial system is an interesting case study in financial in/stability. It’s certainly a different beast from the traditional financial system.
Funny, my impression is the opposite. Blockchain and DeFi are still quite limited in what they can do relative to what’s going on Wall St. It’s the blockchain stuff that’s still a toy. A novel and fun toy, but still comparatively a toy.
Also fwiw, so far cryptocurrency is a debtless financial system, since without identity you can’t have credit ratings or any way of enforcing repayment. So a 2008-style credit collapse is impossible. It’s highly volatile of course, but at least not subject to a GFC or Great Depression style credit collapse.
(There are flash loans, but those loans are made and repaid instantly in the same smart contract, and if they can’t repaid then the smart contract fails and the loan was never made. I don’t think a buildup of risk similar 2008 can happen with those)