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Comment by halflife | Hacker News Reader

Ah I understand, so it’s backed by an actual stock, and you just trust the broker to not liquidate and leave you with nothing.

But what is the crypto value here? Why not just a database row?

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Because with a database row you don't risk having SEC suing you into oblivion.

Blockchain tokenization is only for high risk negative reward people.

I guess because it's easier to trade USDT for stock tokens in an Ethereum contract. Same reason USDT is on the blockchain and not just a database run by its owners, who are already centralized of course.

There are also a lot of examples of contracts with some centralization that would appear to remove the entire point of using a blockchain, but they're simple enough that the blockchain is actually easier than hosting their own API, dealing with auth, keeping ddos and hackers out, etc.

I’m pretty sure a database row backed by an app is much easier than handling crypto.

And decentralization here doesn’t mean a lot when you need to trust the broker with real stocks backing.

Database by itself is easy, but the rest of a public-facing exchange would be a lot of security to get right. I've seen contracts for blockchain exchanges, they're not that complicated, and the footguns have been figured out already. Once they set that up, they don't have to host anything publicly, or very little. The orders are typically matched off-chain, but their backend just talks to the chain, not end users.

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