We saw it just a few weeks ago after what can only be described as a run on the Terra ecosystem, when  Promising 20% Interest on Stablecoin Deposits Raises Concerns,” Bloomberg, March 23, 2022, https://www.bloomberg.com/news/articles/2022-03-23/terra-s-promise-of-20-defi-return-raises-sustainabilityconcern. 5 everyday users were seeking restitution and even experienced DeFi players were discussing ways to compensate retail investors.
7 This leads us to the main reason, in my view, that society wants to regulate new and poorly understood markets for financial products. It’s not to protect high-net-worth investors but to protect society from the often-irresistible pressure to socialize the losses of investors with limited resources, and to limit the spread of financial stress.