When code is neutral but the system is not
Why technical impartiality does not guarantee fair outcomes or stability in DeFi.
One of the most repeated mantras in DeFi is that 'code is neutral'. The idea is appealing: clear rules, automatic execution, and absence of human discretion. However, the recent history of the ecosystem shows that this statement is, at best, incomplete.
The code may be neutral in its execution, but the system that emerges from that code is rarely so. Incentives, unequal access, the speed of capital, and information asymmetry transform seemingly impartial rules into profoundly unbalanced outcomes.