Series 2 Existing Problems of DeFi Asset Management

1. Poor User Experience

Currently, the use of DeFi applications requires additional efforts on the part of the user. A major weak point closely related to the technical implementation is the usability or user experience of DeFi protocols. The protocols are complicated and mostly designed for crypto-native users. The UX of DeFi products should be one of the top priorities for developers.

2. Anonymous Founders are Very Risky

Blockchain-based applications are open and transparent by default. Many of the developers are taking this opportunity! This is beneficial because anyone can inspect the project and confirm that things are working as they intended. Because the source code is public on the blockchain, it’s also simple for anyone to copy existing projects (“fork” the project), change a few things, and release a competing platform.

3. Community Governance is Challenging with Inexperienced Team

There is always a chance that a DeFi project can change who runs the platform or how it is operated, sometimes with little to no warning. That’s why the projects are introducing token-based governance.

3. Technical Issues

Smart contract vulnerabilities are always a risk of DeFi protocols and it is closely tied to another common problem is ‘User Error’. Even if developers think their code is airtight, they cannot anticipate the ways in which users will interact with their applications.

4. Other Problems

Decentralized projects are mostly operated without a license in most jurisdictions, regardless of where the end-user is based. With regard to taxation, the handling of DeFi assets is also not clearly outlined in most jurisdictions.



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DeFi ETF Index Fund, basket of auto-compounding LPs