They are much less enthusiastic about discussing incentives when it comes to things like exchange operatiors front running their clients, centralizing forces in crypto generally, etc.
There is no world in which they can put that genie back in the bottle, so I really hope they don’t actually believe it’s “temporary.”
https://uniswap.org/blog/uniswap-v3-dominance
So there is a world where centralized exchanges have far less relevance than they do today.
Edit: Also, Uniswap...ehhhh. Not a great example for your point.
At some point, you need to interact with the off-chain world (say, when you want US dollars and not tokenized US dollars), and that path to the physical world becomes a point of failure that can be controlled by mundane means such as uniformed people with guns. The crypto-utopian solution is to move everything on-chain. The pragmatist solution is centralized exchanges that more-or-less plays by the rules of wider society and is allowed by society to move stuff in and out of the blockchain.
In this context Circle is still a centralized party that's necessary to interact with the off-chain banking world. But Circle has much less room for chicanery than a traditional centralized exchange. There's no opportunity to front-run, insider trade, liquidate your customers or anything else that OP brought up in the context of centralized exchanges, because all Circle is doing is filling the very simple task of converting 1.00 USD to 1.00 USDC and nothing else.
And even that role might be obviated once enough people transact directly in the stablecoins.
(Not necessarily saying it's likely, just delineating the hypothetical word where DeFi has maximally taken over.)
Coinbase has already started doing that, by abolishing the distinction between the stablecoin, USDC, and its bank deposit USD.
It's entirely plausible that other financial institutions, beyond commpanies like Coinbase which are heavily involvd in the cryptocurrency market, begin doing that as stablecoins gain wider credibility and adoption.
And it’s it’s not even the service I was referring to (which requires that the asset classes be kept distinct).
I swear, something about that comment just set people off, when it should be uncontroversial with the caveats I gave.
Your point was well supported, so I don't see the reason why it got downvoted.
>>which requires that the asset classes be kept distinct
Yes it's not exactly what you described, but functionally speaking, it is quite similar as it enables on-chain and off-chain fiat to be converted one for one.
Please, come back to me when Uniswap's market cap isn't 1/3 of Coinbase's.