What Defi?! It is more like a Nofi

In 2021, the most mentioned phrase was Defi, but no one wants to talk about it in 2022. 

Multiple explosion of the Defi pushes believers away from the service's credibility.

https://twitter.com/Degen_Alfie/status/1560646139673997319

You probably wonder what Defi then?

What Defi?

Defi or Decetranlized Finance is a myth.

There are many benefits that Defi claims to have:

✅ permissionless and inclusive

✅ real-time and transparent transactions

✅ users can retain custody of their assets

✅ smart contracts are highly programmable

✅ DeFi data is tamper-proof, secure, and auditable

✅ many DeFi protocols are open source

Those benefits are turning into questionable features:

🤔 rug pulling potential

🤔 there is no way to dispute transactions

🤔 owners bear risks of their losses

🤔 smart contracts are manipulatable

🤔 audits are subjective 

🤔 protocols are hackable

Why Defi?

I do not see any necessity for Defi protocol other than making it convenient for whales to wash away their money at this point.

The majority of the applications lack consumer protections.  

Even though collateral requirements are high, it does not prevent the sudden liquidation of companies during the market downturn.

How to improve Defi?

Despite all innovations on the Defi, transactions are traceable, and parties of transactions are identifiable. 

Of course, that will go against the purpose of the Defi and cryptocurrencies, but to improve consumer protections, it is also important to shell users from any potential losses.

One way is to provide a unique NFT as their identification check to help users to verify their transactions.

Another way is to deal with the Cefi platform and its consumer protection services.

Highly leveraged companies can also check frequently with their leverage so that their funds will not be liquidated during the market downturn.

https://twitter.com/DrNickA/status/1549274771225026560

We can do more to help protect users rather than victimize them and set Defi away from the potential future. 

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Photo by Lukas Blazek on Unsplash