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They should be since it's Decentralized Finance.

Ratimov had a topic on this and if you haven't seen it yet, visit https://bitcointalk.org/index.php?topic=5275538.0

In that topic, DeFi was defined as:

However, DeFi Watch recently reported that majority of top DeFi projects today isn't as decentralized as they seem. You are probably aware that most of them are controlled by a few individuals or what we call as the "core team" but do you know that they can change the codes without the community consent? They can even adjust or compromise a user's deposit balance if they want to. It's possible for them to do all of that since they have the "admin keys" to control the smart contract.

Admin keys in most of these DeFi projects are protected with timelocks and multi-signatures for security and to try to make it look more decentralized.
- Timelocks delays the implementation of upgrades, code changes, or transactions made by developers. This allows the community to review what the team is doing before it takes effect. In cases of hacks, the time lock allows developers to block or invalidate malicious codes.  
- Multi-Sig means it takes more than one key to sign and authorize transactions.

The problem is how do we know the level of security of these admin keys? Access to them is limited to a few people so we won't. The core team can only say it's highly secured but we cannot verify that. What we can only do right now is to trust what these core team claims. Some of them are even anonymous  ::)

If you want list of projects in the report, here are your must read articles:
- https://defiwatch.net/admin-key-config-and-opsec/what-is-admin-key-risk (Watch the video)
- https://cointelegraph.com/news/how-many-defi-projects-still-have-god-mode-admin-keys-more-than-you-think


P.S.
This post is not to discourage anyone to look into DeFi projects but to try to educate everyone of things they are not probably aware of. As we all know, it's easy to get caught up in the hype and invest immediately without looking into technical details.

It's only a matter of time until some DeFi developers will start abusing their admin keys privilege to scam people, this field is ripe for that - tons of investors blindly throwing their money in anything "DeFi", just like it was with ICO and blockchain in 2017. Anyone who is playing on this market right now needs to understand that sooner or later the hype will be gone, and when that happens, a crash will come.

yes, any system that people will create if they are behind it which makes goals only for profit and deceit, then everything will end up empty. it's no different like when ICO started and it's very popular but when those people start doing things that are not praiseworthy it ends up messing up, I believe the same as the current defi. to be careful in a way that is not wise in every new system there must be something that is not praiseworthy.

There must be a trend season every year, the first I know ICO in 2017, many people were deceived by the success happened at the first ICO after that success ran many people got stuck in ICO in 2018 fraud occurred where scamer took advantage of it I know this will risky at the end.
Then the second IEO appeared in 2019-2020, IEO sales were successful involving a lot of large exchanges and in the end it was successful too, but now it is difficult for large exchanges to accept projects because most of them are only able to pay low exchanges and at the end of the token becomes shitcoin after entering low exchange, this is screwing too.
So now DeFi must know when to take advantage of DeFi benefits, I am also sure that the hype that happened to DeFi will be destroyed too.

They started to use DeFi to scam people. A lot of people already REKT using some DeFi. Just like a ponzi scheme recently in our country which extremely spreaded all over, it's called Forsage. It's kinda a pyramid scheme which you will need to invest first before you will start to earn or you need to invite first some people and make them to invest before you can start to earn.
These kinds of projects are destroying the ecosystem or image of Decentralized Finance (DeFi).

Please look at Define the (scam) DeFi (https://bitcointalk.org/index.php?topic=5273078.msg55114472#msg55114472). People show little attention on my topic but if you are patient to read my topic and have some sort of cautious on scam projects, you can find some similarities between DeFi projects and stake/ masternode projects.

Instead of running network on proof of stake algorithms, DeFi projects are run on ETH network with smart contract. You brought a good point that smart contract is controlled by key that is hold by developers.

SUSHI project is a very valuable lesson on how developers can abuse DeFi projects. The refund later of developer does not make sense. Scam attempt is never good for one project.
https://coinpedia.org/news/sushi-dumped-still-a-good-gain-option/

Centralization, it is but people are misled and their eyes are blurred or blinded by profits.

In my point of view defi projects are mostly a kind of pump and dump projects this is what I have seen so far after see the performance of lots of defi projects, I understand there are some defi projects which is quite profitable so far but it's not mean I should praise them anyways I don't have much expectations with defi I only take them as a temporary opportunity.

There are DeFi projects that are still useful like Serum, Chainlink and other that have specific goal or purpose in the community, though those who are not really useful still got momentum to be notice and succeed sure to DeFi popularity and hype that we can take advantage in short term.

I think those are Yam, Hakka. After ICO the price go down so much. I think Defi just a short trend.

A lot of people will get screwed by these DeFis if they will not be careful on investing these projects. Though I believe there are few of them that are sincere like the Chainlink you mentioned, but most of them will die in the next few months. Once the devs are finished with their pump and dump scheme and got loads of money in their pocket, they will exit silently. This hype overthrows the corona-hype though.

Generalizing the DeFi projects useless is inappropriate.

This is like when ICO hype is at its highest. There are still some DeFi projects that are trusted. Its just that they are being covered by this scam DeFi projects. My advise to the newbie investors out there is to not to invest at this moment in DeFi projects unless you know when to entry and when to exit (I call it hit and run :D). Don't buy these tokens and hold for mid to long term hoping that it will be a successful one. Right now DeFi projects is being swarmed by these scammers who are trying to scam you guys.

Some of them already abused their privilege. Sushi was the first one if I am not mistaken but the developer returned the $14 Million to the treasury after some community pressure and fear of jail time. Yfdexf was another one that exit scammed with $20 Million.

The top DeFi projects which was reviewed in the post will less likely scam compared to newer projects since timelocks and multi-sigs are in place but stay cautious. If you are just an investor and understand little about how these codes and security measures works, you'll probably be the last to exit when shit happens to projects you poured your money into.

The DeFi trend is a mockery of the tenets of trustlessness and decentralization as was propagated by bitcoin. Most of them depend on setting up a website that has an instance of a DEX running on imaginary tokens of the protocol itself. The concept of a DEX or Decentralized Exchange is nothing new. It has been there since the time that people wanted to trade BTC.
The concept of listing your own tokens/ assets had already been explored by Bitshares, Ardor etc.

The main feature is the ability to create and earn fees from a liquidity pool. It is like a public owned exchange where the liquidity providers benefit from the fees. There is value in that because it is allowing people to trade on a non-KYC basis without caring about lack of liquidity. The whales who created these Liquidity pools to benefit from the fees were not saitsfied with the return. This is when the whole hype of "Governance tokens" has started. Now everyone is out peddling their own token for governance, staking, shitting and pissing. That is the problem. Everyone wanted to be bitcoin. Now everyone wants to be Uniswap, Curve or YFI. This is when the scams start in the name of the latest buzzword. Back in 2017, "Blockchain" was the buzzword. Now it is DeFi.

In the process, they are DeFiling one of the most promising opportunities of crypto.

There's actually mix feedback from the community. It's OK until you're making money by trading on the DeFi hype. Primary concern is how we're utilizing the tech. As UNI gave us a huge amount of money for free. Here, I do trust UNI it has a very promising future, assuming it's a strong team developing it and a solid coin.

Yes, UNI has given some money for free and UNI looks very good in the future, but are you sure UNI will be a promising long-term investment in the future? I have no bad intentions about UNI but I am just asking about what you say, because there have been many projects like this and give away their coins for free but in some time the coins they manage will be bad in the future, I just assume because I just want to looking for the best for long term investment.

Thanks for a very meaningful post, I realize there are a lot of people who don't understand Defi but they still invest a lot of money. After encountering many scam projects, they complained to their fate and blamed the market for not being fair to them. This is an article to help new investors not make the same mistakes as those greedy.
Recently, I also see many projects that are not considered Defi but they still stick with Defi label to attract more capital, what do you think about this issue?

The DeFi phenomenon is a very cool innovation in the world of cryptocurrency and financial systems in general! However, many scam projects and lack of regulation can ruin this system... That's why they say about a short-term trend and a hype, like ICO 2017...

I'm pretty sure that DeFi is not a short trend. It will continue, but only few best projects will remain. For example, Synthetix is one of the DeFi pioneers. They are working on the project since two years ago when the word DeFi wasn't around.


There were many scam ICOa back in the 2017. and that didn't make all ICO projects fail. Some of them are still very successful projects.

That's right, the DeFi phenomenon is beyond expectations...
This DeFi HYPE moment will definitely be used by everyone, including the con artists. must be careful in making decisions when want to invest in one of the DeFi tokens, do not get stuck with HYPE because it is very detrimental.

Most of the projects impersonated the DEFI and raised funds and disappeared. Some DEFI projects have ridiculously high returns.
People still praise DEFI but I will observe them. Time will tell which DEFI model is best and which projects will exist in the future.
People do farming just to earn project tokens and sell them. The benefits of holding tokens are few. YFI has mined 30,000 tokens. A large number of investors have left and switched to other projects.

DeFis are mostly still in their early stages we can expect to see better and more professional platforms in next 2-3 years.
Till then developers need to come up with better interface. Fool proof security, better products and services. More options to make money safely.
At the moment risks like scams, smart contract bugs, fake stats or fake promises are damaging the sector so the good projects should make sure that they come up with a better paltform.

Defi has been around since 2017, and it's still not making a good trend,
in my opinion Defi is just a temporary trend, this is like the trend of exchange coins, OKB , BNB, and Huobi Token have experienced high increases,
and reached new ATH last year, and now all back to a low price, so will a Defi coin or token be like that

Really mate ? I didn't knew that defi already are created before but what I thought is defi are created starting by this year . On 2017 the only thing that is on trend are ico but there could be defi and it's not popular because only  bad projects are created that time .

On this year ,there are no trends so defi devs try again and created an exceptional projects and it was a succesor . exchange owned coins that you said aren't just a trend but they are still there being used .

The only way to get a nearly perfect crypto based financial ecosystem is to come up.with a hybrid model, a platform that is composed of bothe centralized and decentralized components where and when required to suit the userbase and development of market to next level.

The same situaiton here as with ICO. Tons of scams/dead projects without feature and only several of them are reliable

Some people are already scamming using this hype of DeFi. This is a normal thing for scammers, when there is a hype in the market, they use it to scam. Those of us who have seen ICO hype have seen how people run after hype and invest their money in scam projects.

Yet something like that can be expected, because good projects always come but because of some bad intentions people, even good projects do not succeed.

You can read the first and second comment of this topic then you will find the answer of your question.
In my opinion a few of DeFi projects you can trust but most of them are scam.

Developers needs to convince more investors that the project is not just a pumped and dumped business, that they really have something to offer inside the business sectors.



High risk indeed, more and more scammers are inside this platform and they are damaging the system, if you do plan to invest make sure to go deeper before placing your entry.

DeFi appeared much earlier than we imagine. Take for example the same Link that has been working since 2017. In 2017, we considered it an ordinary ICO, by the way, I took part in it then. And only in the Wake of the hype around DeFi, we began to look at those old projects in a new way. So, when the hype around DeFi ends, there will be really high-quality projects on the market that will continue their development.

I'm not going to talk much about the DEFI project right now, I've heard some of them end up being scammed like YAM, sushi, YFFIi and many more that I don't know yet. the DEFI project is still new and it worries me for new investors who don't understand what DEFI is. Plus at this time more and more new DEFI projects have sprung up, especially those that mimic or use the name Y (Yearn) or Y Series.

You need to study the whitepaper and the code very careful to make sure they are really 100% trustless, normally most of them claim to be like that but we do not know how much they have control over the coin itself. For example, can they do a rollback? Are they really still coding it and making changes?

When a project makes a better change to a coin and make it better, that is both good and bad because it is good since the new addition made it better but also bad because it means team still can change stuff on it meaning maybe one day they will do something bad and make it worse? That is why I am not entirely sure if we should be focusing on defi projects that gets better, I think the ones that started good and stayed like that without any change is a better option.

Well that's a bad news. I honestly dont know that they have the "admin keys" and I thought the decentralized finance comes with trustless system in bundle but turns out it kinda different. If an ICO that reveals its team could turns out to be a scam I guess defi projects which have "admin keys" is not far off from that and we here are talking about money that could make people do some stupid thing. But, many people out there seems to stay uninformed and don't know this information hopefully its not gonna be ICO 2.0

Yes, Defi project is trustless, Yeah many are good but most of them are shit. Defi also is a den of deception, many people make Defi project just to scam people, Hype is a great moment to take advantage of the situation. So better you skip the defi project and choose the really good one.

DeFi is not just trust less, its a decentralized ecosystem and open source govern by smart contracts. That was the plan and intention, no central authority, belongs to nobody.
This transparency, inclusiveness and autonomy has proved DeFi to be self relying with independent of any other party. It has also give rise to borrowing, lending, decentralized trading (DEX) and peer to peer predictions so easy.
Due to it trust less systems, it gain crypto attention with a total value of 11 billion $USD worth token locked on DeFi.

For every trend, there are some projects that tend to make quick riches without use-case, that's why some investors are still skeptical about the whole hype.
One of the examples is YAM, the developer dump token on investors moving closely 14m worth of Ether from liquidity pool but later apologies after the damage has been done. The trust is not longer there.
Its too early to conclude on the trust part.

well like other hype which is only good at the beginning of the project but when it is too long and many new DeFi projects are created it will make them see the potential to scam many more people and eventually make the cryptocurrency name bad again and destroy the cryptocurrency.

Either to say Decentralize or Centralize, we can't just all find it safe and always can be trusted, not unless if we are choosing those projects that have been existed quite long with good market performance. However, it was unlikely to see how these Defi projects sprung around and I know that not all of them are fueled by the interest of the people seeing them it surge but it is just because it was drag by the hype.

As if each member of the core team got different perspectives or cannot be influenced by one another ::). It's a little bit unbelievable on that part. Of course they naturally have unity (that's why they are called a team) so if they will be given a chance to manipulate the code, especially when the project is on its hype, and the greed kicks in then I'm sure they pull it off.

But well, Defis are not different in the rest of investment schemes thus we can't look at it as the only untrustworthy here lol. All I can say is "Pick your own poison". Scammers are inevitable so be wiser.

For me DeFi is just another way how cryptocurrency can be accepted by people, especially people who don't understand cryptocurrency,
before DeFi exploded the concept of Decentralization already existed and many projects were using that concept, it's just that luck was in favor of new projects.
and we as capital owners must be wise when deciding to invest in the DeFi project, make sure not to follow the HYPE that is happening, and the decisions made are purely from our own research.

If greed can make us do stupid things, then from now on get rid of that greed, because obviously that trait is not good for anyone, and those who put thousands of dollars in smart contracts will definitely have some judgment before they do.

The image of defi is getting bad due to scam projects riding on the popularity and because of the hype. So even its not the main purpose why defi were launch (since there's more to look into it) people are seeing these projects as a way to earn quick. It is common for investors to be attracted in projects that likely to give profit in short term thats why many investors are just going with the flow and not thinking of the risk.

Whether it's trustless or not, if you think you can profit from the DeFi project, you can still use it to make more profit. We need to do that with any crypto project because I believe the crypto is the new way to have an income source.

The DeFi project is just another project similar to ICO and IEO, but with the new idea, which is different from previous projects. As long as the DeFi project still gives you profit, you can still use it for your own benefits. There will be many new projects like ICO, IEO, and DeFi, and you can choose to participate in the project or only watch other people take the profit for them.

Yes for the most part, trustless.

Many newbies don't care or bother whether Defis is getting bad reputation or not, all they care is investing in it and make quick profit without considering risk involved in investing on it, sooner or later many of these gullible ones will fall for one of those Defi scams, taking a look at bounty section of the forum a lot of Defis projects had sprung up lately am very sure we will witness a massive surge of those project till next year due to the media hype this project is getting on daily basis.

The idea of DeFi will spoil because of the huge amount of scam, like ICO in 2017...
Of course, some projects of that time exist and develop, but they are no longer talked about because of the decline in the hype! I think that with DeFi will be the same and it will be widely used much later than now!

Almost trustless. I notice most of defi project launched their IEO by Uniswap exchange. And unfortunately uniswap don't have enough trust score by people but because uniswap create false liquidity. Although all defi project isn't bad. Still there are some project, has greatest roadmap along with potential enough to become successful. Just need to invest money on the right defi tokens instead of fake ones

I think now is one of the biggest moments for DeFi to finally rise and shine.
It has a lot of potential and a lot of people now see the potential, so down to trade and buy it.
However, real usage cases are not same as this mysterious coin's potential, so the hype will eventually die, but good projects will thrive anyway

Not true. Look at all the most popular so called DeFi systems like Uniswap, Sushiswap and Trustswap. All of them users base their trust on the owners of those systems. And Sushi Chef showed he can scam, just as Jeff of Trustswap showed his projects also scammed people.

Stop trusting people.

5 new DeFi projects are currently being farmed on Binance. But only these tokens, even after listing on Binance, do not show the expected growth, but on the contrary, their price falls daily. Obviously, until the price of bitcoin starts to rise, we will not see a rise in the price of the DeFi sector.

At its core, DeFi should be completely decentralized sites, but the question arises, are all platforms that use the word DeFi really related to them? Maybe they just take this word and use it as a cover, and then certainly we can get to scammers. Moreover, now it is very difficult to determine how much this or that crypto platform is related to DeFi until you take part in it. But these are all the risks that can lead to both success and loss of funds. And more recently I read one article where it says that there is no decentralization and that each project is now centralized and affects all its processes. Honestly, I want to believe that DeFi has true decentralized platforms that work honestly and without cheating.

Yeah they all claim to be decentralized finance but are they really decentralize enough in the sense of lending and borrowing! an actual decentralize finance project would have been the best way to rid off traditional financial system because in this case you are directly interacting with the system without any third party involved but from the way different defi project coming up daily i doubt they are even close to a full decentralize finance project.

all of them still say 50; 50 to say investing in the Defi project is safe. something popular will soon be chased by scammers. There will be lots of Defi scams from now on, you will see that in the market developments over the next few months. some of them are already insight, and we will see in more.
enough trust in those who work with platforms that convince and have a larger community. it can make a little confidence to be able to join the project.

Not all but most of the defi projects have been rugpulls. Many defi projects don't any clear visions and concrete plans how the those projects would be productive in crypto space. Scammers have exploited the opportunities they saw from YFI which recently reach to its new height so scammers dreams to have such kind of success as well and made their own defi projects then eventually turned out to be scams and left their investors crying.

Nowadays people like to follow the trend.  Defi project is being discussed a little more.  I think this insanity is going to stop very soon.  These projects should be thoroughly analyzed before getting involved.

I believe that defi platforms are the future, the natural evolution of crypto, another way to earn, if you use big sites like uniswap, balancer, aave, compound there should be absolutely no security problems, it seems that the same fulcrum that has suffered several hacks has compensated all users who had invested in the platform

Precisely, before getting involved you need to make sure that you have a broader information about the project that you'll going to participated, there are lots of scammers who are riding with DeFi popularities without taking care you'll lose your investment in a short
span of time, best to make sure that you have everything before doing any participation.

Actually I don't really like the concept that uses the DeFi project, but I am surprised that most people are already crazy about the concept, so I want to see to what extent the concept that this DeFi project applies, will work well, or will replace the ICO / IEO in later, or it could be the other way around, sinking faster than ICO / IEO ..

Aave, Compound, DDEX, Yearn Finance, Nexus Mutual, and Synthetix are projects in which te developers have some key control over the funds unlike the MakerDao, InstaDapp, and of course Uniswap which the team has no key control. I have already thought of dumping the tokens I hold  ;D


Well if those crazy people almost like printing money out of thin air thru the pools, its a good reason to get crazy.

Not all DeFi projects are trust less, for example the hack that took place on kucoin have alot to say about been decentralized or not, after the hacker stole many DeFi tokens almost all of these so called DeFi projects swap their tokens, if they are truly decentralized they will never swap tokens

We gave away a huge amount of UNI for free. At first glance, yes. But nobody canceled the law of conservation of energy. If something has appeared somewhere, then, accordingly, someone has lost somewhere, or in this case, it is still ahead. It can not be any other way. So they don’t give anything for free, it’s someone who paid or will pay.

This was to be expected. Developers want to join in the hype and make a quick buck by making investors believe that their platforms are truly decentralized. But deep inside, they're just another banking system which brings back the middleman. "De-Fi" is all about being trustless than anything else. After all, this is crypto and Blockchain tech's purpose since 2009. Going against what was originally established, greatly defeats the purpose of crypto. I guess that some people will eventually migrate to truly-decentralized "De-Fi" platforms once they find out that some of them are utterly centralized (requires trust). It's all about eliminating the single point of failure (which in this case are the "admin keys") for "De-Fi" to work as intended. Otherwise, it won't reach far enough in terms of mainstream adoption.

Nonetheless, I believe that most people will continue to use the aforementioned "De-Fi" platforms even if they're not trustless. That's largely because the general public doesn't care about decentralization at all. As long as this is the case, the "De-Fi" space will be subject to manipulation and fraud. At least, the decentralized and open source nature of crypto/Blockchain tech will allow trustless "De-Fi" platforms to remain relevant in the industry. Choosing from one type of platform from the other will truly depend on people themselves. Just my opinion :)

They created token and issued it for free so literally they made tokens out of thin air as well so no need for someone to pay random people on the internet, by doing this the free token got so much of value and almost half of the shares are in the hands of the project team so they made huge profits out of nothing and also made their trading platform into more people with this lucrative airdrop idea.

It's not that I don't believe it, it's just that I observe that the DEFI project is still young and in the last few months many DEFI projects have ended up scammers, although not all of them, but I personally still hesitate to invest in any DEFI project.

you were right about the current state of affairs. Many people just rate the project as good or not based on its marketcap, but they don't know that behind it are scammers with A LOT of MONEY!
Crypto market is like a game of money, poor scammers and not good enough investment will die like everyone else. That is the harshness of the crypto market that I often talk about.

Yes, that's what I meant.  It should not be allowed to float in our trend.  If you have to invest in a project, then it is important to have a good knowledge about that project.  But only time will tell how the Defi project will move forward in the future.

this can be said about absolutely any project not only from the DEFI sphere
it is also worth remembering that as soon as a segment of the crypto market becomes popular and many investors enter it
 there are also many scammers who want to make easy money

Scammers exist because they know that they can make money from innocent people who are new it the market. They can easily manipulate their minds, offer huge returns, and yeah, can be enticing. But not all of them succeed, I know that even newcomers are already aware of this kind of scheme, preventing them become prey to these scammers. If we are not supporting them nor allowing them to succeed, this a way to minimize their activities and brought them to an end.

It's nice of Vitalik to acknowledge the fact that a level of centralization for Ethereum based projects is necessary to take matters under the team's control at the beginning. The problem is many of them don't disclose these facts to their community and straight out lie that they're decentralized until they are caught by third parties. I disagree that "Exit to community" is underrated. No matter how you look at it, the core team is still dumping minted tokens to the community [money out of thin air]. In a way, it's similar to a company selling shares of stocks except that they don't promise dividends or other returns.

I've read the Uniswap centralized governance in the same article I referenced in the post. It's one of the few DeFi's with no admin keys but there is still a level of control as you pointed out.

That is the trouble I have with defi that people do not seem to understand.
How could you trust a place that says they are decentralized in the name but they are not decentralized in the workings?

I mean if you check the defi structures of almost all defi coins you will see that they are not 100% decentralized which means by calling themselves defi they are lying to use because defi means decentralized finance whereas they are not decentralized.

Now they have already lied to you with just the code and name contradicting each other, how the hell do you think I would trust them with anything else? Obviously it is not going to be anything else that I could ever trust them, we are talking about something much bigger with the decentralized fake so nothing else could ever recover that.

Many individuals as of now REKT utilizing some DeFi. Much the same as a Ponzi plot as of late in our nation which very spreader all finished, it's called Forage. It's sort of a fraudulent business model which you should contribute first before you will begin to procure or you have to welcome first a few people and cause them to contribute before you to can begin to gain. Once the devs are done with their siphon and dump conspire and got heaps of cash in their pocket, they will exit quietly. This publicity topples the crown publicity however. Indeed, this is more similar to a quick in and out simply like when ICO was all the while ruling. I think putting resources into the long haul is exceptionally unsafe and it is better in the event that we want to consider putting resources into top coinmarketcap.

In as much as I might not totally agree that DeFi is totally decentralized, but to an extent I will say the developers of those projects can still abuse their powers if care is not taken. To be frank, taking a look on most projects today claiming to be decentralized, you can hardly see any truth in their claims, they once in a while protary traces of centralization and since most people are already after profits they fails to ask the right questions. In my own opinion, the only coin which is completely decentralized is Bitcoin, in the case of Ethereum, I can say to a great extent it is decentralized but not 100%. Now if a major project like Ethereum can not be believed to be totally trustless, I think I have seen a post challenging the decentralization of Ethereum; then what more all these DeFi projects flying around?
Nevertheless, in my own simple opinion, I would say, be careful of the projects you invest in, if in doubt, remember that Bitcoin is the best to hold.

Most DeFi projects are just pump and dump coins, only a handful coins like the ones that are official coins of the decentralized exchanges are good ones to invest in, other is comp token which is really good one. Developers are rushing in to make money on the DeFi projects because of the fact that people are investing in these projects like crazy and without analysing the use case and also even when the project is not even having a Whitepaper.

For the entire DeFi sector, the correction of bitcoin is particularly dangerous, which is associated with a decrease in the price. In this case, when BTC loses 5% of its value, DeFi tokens can lose up to 50-70%. And if we are confident that the value of bitcoin will recover, then we do not have such confidence in relation to DeFi.

I think rather it should be built on a foundation of trust. With something as not being able to know whats going on as an investor, i dont think anyone would get involved in it. All you can do with a blind eye is trust the team behind it, still pretty sketchy but what can i say.

It’s good that you create such awareness, people really need to open their eyes and make their DeFi choices wisely so they don’t end up investing in the wrong. Matters of security are things that shouldn’t be taken lightly, but as usual the team behind a project will never tell you that their security is poor, no matter how bad it is they will always claim to have the most advanced of security features.

It’s now up to the investors to look more into the project, and if there is anything that doesn’t seem right to you, it’s a sign that you should quit early, rather than continue and bear the consequences.

If we talk about DeFi, then most of the projects that journalists attribute to the DeFi ecosystem are not decentralized.
The creators of these projects can block tokens at any address, create white and black lists.

The second problem is hamsters. They don’t study, they want to lose money.
They invest in a pool of liquidity and do not understand that if the price of one of the assets falls, they will lose money.
https://bitcointalk.org/index.php?topic=5276515

If you don't know what to invest in, check out the projects in which famous cryptocurrency funds invest, for example Andreessen Horowitz
https://a16z.com/portfolio/

In any developing industry, fraudsters come first, so before any investment you need to check everything.

The current state of DeFi and governance protocols aren't as trustless and decentralised as they claim to be. This is mainly because of the fact that a large part of governance tokens are allocated for the team (rightly so because of their work in creating the project). But this creates a scenario where the team has the ability to decide any decision they want to to make.

What do you guys think? How can we get around this problem ? One solution is vesting team tokens and that the team cannot vote for the decisions .

And I presume that they all had learned the past when ICO projects did the hypes, the same thing that it happens to Defi which is some of them aren't then good for investment. We make choose of (some) Defi projects but it is necessary first to make research and avoid losses. We don't need to fall into hypes as many cases that it was only a clickbait that brought us into nothing. We need to be smart, think twice as possible, that is the only thing it helps.

yes, I personally will not easily trust the defi project in this forum. I saw some of them don't have real teams and I avoided them. I also agree with some of the points that you conveyed, at least it can open the eyes of project investors so they don't easily believe the hype of project defi, I mean minimizing the risk of loss early on by not investing money in the wrong place.

People are usually following the money, instead of a project's real use cases for the mainstream world. No matter which "De-Fi" platform it is, if the same has attractive interest rates, it'll gather the attention of the general public. That's the way it works. Sadly, this leads to many undesired losses due to most "De-Fi" projects turning into a scam in the long run. As long as the platform's creator has access to his/her "admin keys" he/she can do whatever he/she wants with your funds. A true "De-Fi" platform needs to be trustless in order to work as intended. Thankfully, it's possible to know if a "De-Fi" project is as trustless as their creators claim it to be by checking the source code. If we didn't have such ability, the community wouldn't had a way to know which projects are legitimate and which are not.

In the end, "De-Fi" will turn out to be speculative grounds than a serious alternative to traditional banking. Unless legitimate projects overcome illegitimate ones, I don't see the industry going anywhere. Most people don't care about decentralization as long as they're able to fill their pockets with money. Because of this, scams will continue to appear like there's no tomorrow. And there may be nothing we can do to stop them. Just my thoughts ;D

some project definitions are good and have been around for a long time such as chainlink, band, and several others.
while the new one was released when Fomo defi went up I was not sure and doubted it because this was like hype and could disappear at any time.
but it's also a quick way to make a profit just make sure you throw it away when you make a profit.

Yeah right, the most important thing is to learn from before like ICO and from the start everything looks fine and over time many ICOs become scams that can harm many people.
Currently Defi is becoming a trend, and don't be too easy to believe before doing good detailed research and continue to learn from experiences or mistakes that have occurred so as not to regret and lose.

an investment risk as to the project Defi will come to a lot of product Defi which appears the price of coin Defi in the early entrance exchange actually rose 100x but with time they also project the price would be significantly reduced so it all depends on the traders who will take advantage of the opportunity to obtain profit as much as possible.

defi tokens like oikos, dia data able to gain incridible success. Especially wonder about dia data. around 5 cent was Ico price but the price of dia data is raised around 100x, about more than $5 ath. But suddenly the price dump 4x without any reason. Thats doubtful. Besides Another defi token Yearn Finance (YFI) cross $43.5k milestone and dump 2x which is really shocking. Can't trust such kind of defi tokens

Those, who really affect cryptocurrencies market and make billions on it, say that DeFi projects are on the hype. However, as soon as this hype wave will grow in the nearest future months, it is worth investing in them. The most difficult thing here is to catch the peak of the popularity growth.

If you said so, then you can say that bitcoin is trustless too because it has core team who has access to change the blockchain coding.
I think defi projects are still decentralized, not because it has no core team, but because it running on blockchain network which is decentralized, even if the project has core team behind it.

THIS!

The main thing about decentralized finance is taking out a centralize party who could take control to run away with your money and etc
However in reality, the Terms used =/ what is implemented

Look at what happened over the past few months
Some Defi project Rugpulled = pull plug, some got their token stolen and more
Admin Keys = is like a key for ultimate changes/way of exit for scammers who plan to steal money

If people can't understasnd smart contracts, it is actually risky to put their money into the so called "DEFI"

DEFI itself is a good tools/product and it will continue and even evolve to something better, but matter of time

The reputation of DeFi projects is under scrutiny. The failures of some DeFi projects in recent time is actually making the community look intently to the trustworthiness or otherwise of DeFi.

not all Defi projects are trusted, many people make a fake project claiming the project defi.

it is not what we called traders but manipulators is what you mean here and yeah they are the reason why the price of defi projects are really increasing but in time will reduce and some will truly fall.
actually some are starting to return to their level and some are staying very slow moving.
well it can't be compared mate,because Bitcoin has been here since the beginning not like this defi thing that just brought to pump to make investors believe in their existence .

Just look at the recent kucoin hack, devs made the hacked tokens useless, although it was done for a good purpose, it still makes you question the so called decentralization.

Yes, it is because of the scammers who take advantage of the trending opportunities in the DeFi system, so they create fake projects to scam many people in crypto especially investors.

Meanwhile whole market is falling down its a good idea to invest in any major defi project, because most probably they're going to climb their value back up anytime soon.
Overall, it is always a good idea to dig into project's info before investing anything in it.

Defi projects are not totally trustless or scam. People think Defi projects are not worth investing because scam projects are increasing their numbers again, just like what happened in ICO projects from the year 2017 that it has a vast number of scam and unsuccessful projects. So the outcome investors and bounty hunters have left and stop participating in new projects.

Since the success of defi projects depends entirely on the dedication of the project team, we cannot say that all defi projects are reliable. There are too many projects carried out right now, and among these projects, there will be successful ones as well as unsuccessful ones.

98% of them are scam and useless, have witnessed alot of them vanished away few days ago my  colleague sold about $6000 worth of $BLZ and use the fund to buy a Presale it wasn't upto 34 hrs the project vanished oh my God I feel sorry for him anyway.

Now we have a lot of scams in Defi because of FOMO

A lot of tokens going down, it's important to find good project

I am now focused on YFFII, only 30 000 supply and 17$ price, it can easy go to 1000$

The YFI token has already more than halved. Now its price is $ 14,989. This drop is almost three times, and every day its price and capitalization continues to fall. Until recently, the YFI token had a capitalization of just over one billion dollars. Now $ 449 million is left of it. I would not be surprised if after a few days its price drops to the bitcoin price.
Therefore, one has to be very careful with DeFi projects. These are mostly governance tokens and have little value.

Well at the beginning there are not but recently I can say many of the defi-projects are trustless.Many investors are interested in defi-project because they tend to be more profitable than others and that is the major reason why many of the defi-projects are just out to scam people.Some of the defi-projects do not even have an actual team so one should be extremely careful before investing in those defi-projects to avoid scams.

Exactly. Unfortunately, there are many scammers willing to take advantage of the situation by using the concept of "decentralization" in a wrong manner. "De-Fi" is all about being trustless. Taking that away from "De-Fi" turns it into another banking system. Sadly, most people only care about doubling their investments in the shortest amount of time possible. They don't care whenever the platform their investing into is either centralized or decentralized. As long as this mindset continues, there will be substantial losses over the course of the "De-Fi" industry's lifetime. If you want to avoid using a "De-Fi" platform that is centralized (with a trusted third party), then the best way to do so is by checking the dApp's source code. But even this requires a certain level of technical knowledge to be able to differentiate the "good apples" vs the bad ones.

Nonetheless, there's nothing we can do about this as crypto/Blockchain tech's open source nature allows developers to do as they wish. It'll be the individual's responsibility to avoid centralized "De-Fi" platforms as much as possible. With due time, truly decentralized "De-Fi" platforms will remain on the scene while the rest will go down the drain. The market will determine each platform's fate in the crypto/Blockchain space. Just my opinion :)

In the current trend in the marketplace DeFi made a very important role that makes the cryptoworld alive and surviving once again amidst of this pandemic period which for me and I can totally say that DeFi is a very trust-worthy project and development if you are really looking for a very good and beneficial investment.

This is why now they introduce the NFT projects. This after some news regarding Defi that takes toll on every investor that had trusted it and later on it found out that DEFI projects are not reallt decentralized because it could be manipulated.

How I wish that the next project especially NFT projects will be more reliable and trusted projects. This is what we are looking now because we need more projects that could be funded by the crowd to get back cryptocurrency market at its best with new projects.

for me, yes, but I am confused by my friend, if you realize that DEFI is actually a new tool to get short-term profits in 2020. if you only rely on bounty results it is not enough. although greedy but you need to try to enjoy Hype DEFI. I don't care what people say, as long as the DEFI project is profitable for me, then I do. I know that Defi is Hype, so when you've made a profit, then leave immediately before getting stuck on FOMO.

Some DeFi projects have already abused the word 'decentralized' , remember the Kucoin hack? Several DeFi projects were affected and many of these projects went ahead to change their smart contract to another, that is no decentralized Finance to me, it shows that such projects are just using decentralized name sake

That's why you should avoid investing in defis. Since they are very hot right now, it is no wonder that there will be people who will abuse it. Some of them don't even include the developers' real names on the whitepaper. I think you should definitely check this one before investing in them.  If they want to remain anonymous you should probably not invest in them.

Well, developer's anonymity is not a reason to avoid investing in a "De-Fi" project. They can choose to remain anonymous in order to protect their project against government interference. Consider Bitcoin's founder which is anonymous. No one knows who Satoshi is, yet people trust Bitcoin by investing on it for the long term. To be able to differentiate between a good "De-Fi" project and a bad one, you'd need to do your own research. Analyzing the code is the first thing you'll do when deciding to invest into a "De-Fi" project of your choice. If the smart contract's code involves a level of trust (where the developers can freeze your tokens or gain access to them at anytime), then you should avoid the "De-Fi" platform as much as possible. The only downside to this approach is that you'd need to have some basic programming knowledge to be able to understand the code. Most people are not tech-savvy enough to do this, leading towards many undesired losses in the long run.

Nonetheless, "De-Fi" is all about being trustless. When trust is part of the system, you get nothing more than "Banking 2.0". There's nothing we can do about it, as crypto/Blockchain tech is open source. With heavy-handed regulations from the government, centralized "De-Fi" platforms might become a thing of the past. Just my opinion :)