DeFi protocols that adopt a neutral strategy inevitably introduce counterparty risk off-chain; no matter how top-tier the auditing firm is, and no matter how comprehensive the audit report is, it’s all useless.
Take @Neutrl as an example. Spearbit and Sherlock, the auditing firms responsible, are both top-tier audit institutions in the industry, but they can only ensure the security of on-chain smart contracts to the greatest extent possible—off-chain OTC counterparties’ risks are completely beyond control.
In the hands of humans, I’m the fish.
Next, you can look at all neutral arbitrage DeFi protocols that introduce off-chain counterparty risk.
#neutral