It has been around in crypto for a good 5+ years, which is basically forever in this space.Should be more insulated, but is it ? If I may add sir 100 x leverage trading has not been around forever. No one questioned Madoff paying 12 percent a year but hey thats what makes markets.
Look, here's the deal. Let's say leveraged speculation wipes the market out and it drops another 50% like it did in May. What happens to the value of the stablecoins you're holding? Nothing. Some algo stables might lose peg temporarily - UST dropped to 94 cents in May before reverting - but the backed deposit stables like USDC won't.
The lending protocols I'm referring to are overcollateralized, not undercollateralized. Cascading liquidations won't sink them.