Cream Finance Partially Delists FTT Amidst Governance Contention

https://defirate.com/cream-ftt-delisting/

Cream Finance – a lending protocol for nascent DeFi tokens – has hosted a governance poll around the collateral parameters for FTX’s FTT token in light of severe borrowing abilities.

What started as a Compound fork has since seen niche demand in providing money markets for DeFi assets that are not listed on other major lending markets due to their nascency and high-risk nature. For example, Cream was the first lending protocol to support lending for YFI, SUSHI, SWRV and UNI.

Now, Cream has come under fire after $75M worth of FTT, the native token of FTX, was used to borrow and short leading DeFi assets like YFI over the weekend. FTX’s CEO Sam Bankman-Fried recently took to Twitter to defend the use of $FTT on CREAM following many prominent community members suggesting Cream should delist FTT.

In his tweetstorm, he seemed to imply that any sort of governance vote on CREAM to change FTT lending parameters would be unfair as a single address holds over 75% of all votes. Sam also goes on to provide evidence that his centralized exchange token has a lower risk of price crash compared to the basket of DeFi tokens that are listed on Cream.

Popular anon accounts pointed out that with FTT being a centralized token, Sam could manipulate it in various ways for his own profit at the detriment of other users on Cream and more broadly the entire DeFi ecosystem.

 

The Snapshot proposal on Cream Finance decided to partially delist FTT by decreasing its borrowing power on the platform. This comes in agreement with reputable names such as Robert Leshner, founder of Compound Finance, suggesting a middle ground of adjusting FTT parameters on Cream instead of getting rid of it entirely.

The decision to reduce the FTT collateral goes to show that decentralized governance really rallies around large scale DeFi price swings, however these decisions historically takes multiple days to resolve in order to give everyone a fair voice.

While FTT’s borrowing power reduction can be seen as a win to the DeFi community, let’s keep in mind that these protocols are designed to support uses exactly like this, and at the end of the day DeFi remains a whale’s game to trade however they see fit.

To get more updates on Cream, follow them on Twitter.

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