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While I understand the concerns, I see DeFi as one of the few truly global investment opportunities available today. It's not necessarily the future of all finance, but it serves as a valuable alternative to traditional financial systems. For those of us who already have access to conventional financial tools (stocks, bonds, traditional banking), DeFi offers unique opportunities for portfolio diversification and higher-risk, higher-reward investments.

We're starting to see interesting projects that combine meme culture with actual utility - like how the classic Stonks meme from 2017 is now being used to make DeFi tracking easier on Solana. This kind of approach could help make DeFi more approachable for newcomers.

However, DeFi's real transformative potential lies in providing financial services to those who are currently underserved by traditional banking. The wave of scams during the crypto summer severely damaged trust in the space - many early DeFi enthusiasts who experienced multiple rug pulls have abandoned the ecosystem entirely. This is frustrating because DeFi as a concept still holds immense potential.

The challenge now is: How do we rebuild trust and attract both previous participants and newcomers?

I completely agree with your perspective on Defi and its potential to shape financial services. The integration of meme culture like Stonks into defi projects is an exciting development. This can be seen on its current price value.

https://ibb.co/XWJy5YK]https://i.ibb.co/Jckxp3G/Screenshot-2024-12-14-17-12-01-429-com-bitget-exchange-edit.jpg[/url]

First step towards rebuilding trust is security. We had a lot of DeFi hacks in the last year. All of those hacks in the past made it hard to trust DeFi projects because you deposit money into a protocol and back afterwards but won't find those deposits? Circumstances like that have made it hard to invest and contribute  their assets to a protocol.

If we make it safe enough and all investors whether big or small can be confident about putting their assets in a decentralized protocol.

What are those concerns you do understand if that topic is even a question?

In year 2022 alone there was $3.8 Billion (https://www.chainalysis.com/blog/2022-biggest-year-ever-for-crypto-hacking/) stolen by exploiting DeFi Protocols. How is that future of money? And how is that equally valid alternative for banks? Imagine this happening with actual banks. They wouldn't exist if even fraction of this was a common thing in them.

When it comes to dealing with our money, don't you think that daily successful hacking would be unacceptable. But it's actually so common, that most of us aren't even aware about the depth of it.

Here's a topic (https://bitcointalk.org/index.php?topic=5267124.0) about DeFis so you can see the full picture.

I am not sure if there's any need to try to build trust when this just keeps happening every year (https://bitcointalk.org/index.php?topic=5267124.msg64818314#msg64818314). That would just be lying, not building trust.

trust will be rebuild naturally as long as these Defi projects and devs keep pumping some good quality projects into the market,
back then people think e-commerce is full of scam and unstrustworthy now everyone uses e-commerce. it's just matter of time until people realize the potential of defi and they will also adopt it, it just needs a really high quality project that could compete with the traditional finance and we've seen massive influx of investment from VCs and even the projects that doesn't raise fund at all but still produce a good product anyway.

maybe less then a decade we would see these skepticisim decreases.

I think the idea of rebuilding trust on Defi could be difficult because of its decentralized nature. So if you're a newbie, you could learn the ropes from a mentor before pursuing a career in Defi because they're alot of security concerns and loopholes in the sector. Stonks is an odd name and for a memecoin to have that kinda concept, must be an interesting one. 
Googling it and this popped out. https://gleam.io/tkiAF/-learn-to-earn-stnk-on-discord. Probably since you know about the token, you can give the quiz a try. I'll key in also

Defi is indeed an alternative to conventional banking in web3 or crypto. I have been interacting with Defi for quite a long time both from the start of staking, borrowinglend, and others, and I have so far with good financial arrangements in interacting with Defi it has many advantages, especially in facilitating my activities in trading or other socialfi on web3.

Defi will not die in my opinion, at this time they only see other opportunities that give them an advantage in investing, they are more focused on investments that have far greater market attention than getting interest from the currently available Defi, and in general the narrative in altcoins has a fairly unique rotation, Defi summer may not happen this year, but next year is a mystery that we need to try for the coin.

DeFi provides various features that are not provided by banking, where it gives users the freedom to access various crypto-based financial features as easily as connecting their wallet, and that's what makes more people like the concept brought by DeFi. However, the problem is how in its development, projects related to DeFi have gone bankrupt or scammed, not to mention several problems related to loopholes in the protocol that cause huge losses, it tarnishes DeFi's image directly.

even though the concept of DeFi is interesting and innovative, because of the problems surrounding it, its credibility has decreased, and caused more or less people to be interested in interacting or investing in it. and now it's back to the players in the industry, whether they want to improve the image of DeFi or just let it be, because it should be in line with the increasing reliability and quality of DeFi projects, it will also increase people's trust in DeFi.

Why wouldn't it be? Crypto is filled with scams, rug pulls, and many other dangerous stuff, so being careful is very important and I believe that we need to make sure everything is getting more clear and we can make this a lot better on the long run as well.

I believe that we are going to see a lot of people stay sceptic about the defi market because that is what crypto market is all about, being sceptic, that allows you to make more money and you should be careful with it as well, you are going to get a lot better results if you are always careful and not really jump into stuff. If you make a token, you will see that thousands of people will find something wrong with it, no matter what kind of token you make, they are out there looking for it.

I completely agree with your take on DeFi's unique position as both an alternative to traditional finance and a tool for global financial inclusion. It's not about replacing existing systems but complementing them, offering diversification and access to those who might otherwise be excluded. The intersection of utility and meme culture is a fascinating development, it reflects how DeFi can adapt to resonate with both seasoned investors and curious newcomers.

Crypto space has become filled with so much that, of course - it's natural nowadays to take everything with a grain of salt.
Especially in the projects that need some funds to work with from you - these can be copies, rugs, etc.
So overall, defi is there, but lots of analysis is needed to take that path.

Rug pull on the project and scammers is literally not new on the space even before especially on alternative projecs.  and for me this DEFI is just a new version of making money in the space , i mean they just totally upgraded in order to attract big investors and new comers in simple way.  Because to be honest It's getting easier now wherein the task for eligibility and to become one of the holder is very simple.  Thats why many scam people take advantage of it as well and as usual copy paste in order to attract some fish .Lol
So what i can say is be careful of choosing a project if it's worth to spend just invest what amount we can afford to lose especially those participating airdrops coz there's a lot of shitty projects. And for those holders stop expecting more in a new project coz rug pull isn't new and once you miss the big news you will end up nothing. .be smart enough as well.  ;)

The skepticism that was built around DeFi is regarding its security problem, we have witnessed a lot of DeFi had security breach which caused them lost million dollars assets. Another skepticism on DeFi is regarding its user's privacy as government in various countries have tried to gain control over their users information for taxes, some people see taxes as a way our government steals our hard work money. To put is short, a lot of people distrust the government.

To answer your question is rather hard, because DeFi will be bound and comply with the regulations of a country. But regarding its safety, probably government could build a Central DeFi or give order to related institution/department/bureau which houses several DeFis that will cover its users' losses in the event of a data leak or security breach under law and clear regulation, but again a lot of people distrust the government, especially when Cryptocurrency is closely related with privacy as its characteristics.

The fact that most "De-Fi" apps are full of vulnerabilities, makes most people skeptical. It's no secret that "De-Fi" has been a constant victim of hacks and/or theft. This greatly diminishes mainstream adoption for "De-Fi". Luckily for developers, there are security companies that audit smart contracts to ensure they're safe. It'll be up to the individual to look up the source code and analyze it himself. Only if such individual is tech savvy or has a background in CS.

With regulators weighting on the industry, we will have more safeguards in case something catastrophic happens with a "De-Fi" app. Developers will be forced to make investors whole or face serious fines or jail time. Of course, this will make "De-Fi" less decentralized. But this shouldn't be a problem to many. Especially when most people only want covenience. I mean, who cares about decentralization these days? Ultimately, "De-Fi" will turn into "CeDe-Fi" (a hybrid solution) just to please investors and regulators. The industry is just starting to blossom, so I wouldn't expect it to disappear anytime soon. :)

Hard to once again a platform that made them lose some money that up to today, they haven't gotten back their money. And the people on the team are also not coming back but instead dumping his tokens.

Anthony Pompliano promoted  Defi project with all his life savings put into be to bet on how great the platform is but then also announced the next few weeks he is selling and never turn again.

no need to do this yourself, those big company like blackrock are already doing this by investing heavily into the defi sector, just see ONDO, MANTRA and so on, the RWA is heavily supported by blackrock and also gaining popularity.
most of defi that are really big also having big influx of investment from big VC as well, they are already raising their relevancy through big investment round like these.

things are starting to get better with DeFi right now.

There are the good, the bad, and the ugly.
Mostly - the ugly and the bad currently, so lots of effort and analysis should be put in order to try to differentiate a scam or a rug from a sincere project.
It's a skill that keeps on giving in the crypto space, in all of its spheres.

Things are starting to get better? You clearly don't know that these companies don't give a damn about decentralization. Their contributions will make "De-Fi" more centralized. I'm beginning to think the term "decentralization" is being used as a catch phrase or marketing scheme to attract investors. But in reality, none of the so-called "De-Fi" projects are truly-decentralized. Only a very small minority of them. People only want to make "big bucks", so they will "go with the flow".

The thing is, are we going to keep pleasing the regulators? Or are we going to stand by Satoshi's original vision? It seems to me that things will only get worse in the long run. There won't be any difference between traditional banking and "De-Fi". Oh well... :D

to be honest when investing in altcoins or defi, real "decentralization" is the last thing i'd be concerned because i know these decentralization thing in altcoins or smart contract capable blockchain is just a buzzword, my expectation is just close to zero, well even the word defi doesn't really mean decentralized finance in literal sense but just a protocol deployed in blockchain because some of these defi has their owner holds authority to freeze the protocol whether for good cause or bad cause which means no decentralization here.

just see most of alts right now mainly have validators consisted of cherry picked sets of validators runner. definitely no decentralization there or at best just illusion, that's why when I say it's getting better, mainly because there's smaller amount of rugs or malicious protocol since most of the defi right now are backed by legitimate investors that will force them to not use underhanded method and people could have a ground to choose defi protocol that won't just outright scam them.

DeFi may be a good investment when interest rates are zero or the market is bearish and the crypto winter is starting but all the reasons currently make it an unattractive investment. combine meme culture with actual utility is a new way of saying that meme projects are useful but they are pure speculation and often a bad investment.

Exploits or hacks are the main reasons why there's a decrease in trust for DeFis. This chart alone which is only one from the article of chainalysis and there are others to show how many hacks have been for the past years in the DeFi sector. The source is also in the image I've provided.

https://www.chainalysis.com/wp-content/uploads/2024/01/value-stolen-in-defi-hacks-1500x711.png (https://www.chainalysis.com/blog/crypto-hacking-stolen-funds-2024/)

Let's not forget that "De-Fi" platforms don't have any investor protections or guarantees of any kind. In other words, you're on your own. Not only hacks or exploits are a concern, but also the value of the underlying "De-Fi" protocol itself. If the value goes down, you will lose more money than what you earn. For this reason, centralized finance will remain dominant forever.

At least, "De-Fi" brings "banking to the unbanked". Assuming a "De-Fi" platform doesn't comply with KYC/AML standards (no ID/credit checks, etc). The whole point of "De-Fi" is to bring freedom and censorship-resistance to the masses. If they fail to do that, they are no different than centralized finance. Only time will tell us what will happen to this nascent industry. Just my two sats. ;D

That's right, we are on our own with the DeFi platforms and that is it, there's no guarantee of being protected while our money is in them. Many have lost money with this thing and that's why those that have learned already from such don't ever want to be back from it. It's better to hold whatever you have than to put them into these platforms whether they're decentralized or centralized because you are on your own and there is no one to protect you. While the buzz word about having no kyc/aml or central authority is still being bought by many, that's the point there, you have to trust the platform and whatever they do. But you'll be worried at most times not knowing whether they are still there or probably have gone already.

curious what the data for 2024, so far I've seen less hacking, maybe due to increased urge of auditing their deployed smart contract.
every projects out there always pay big money for audit these days and as a result security is improved, also partnership with big exchange to freeze the stolen fund and revert loss has been going pretty good as well.
though doesn't mean most of defi are immune to hack, at least there's an effort to prevent it from happening.

unlike back in the days when some random just deploy whatever solidity code they have without knowing the best practices.

That's what I think of for this year, lesser hacks but we can't be sure. Maybe the small time hacks weren't reported and so that won't count for the records and audits. I think that the damage has been made, even how the DeFi platforms are going to retain the confidence of their users, still the damage was there already. And it is hard to take back that trust from the majority.

There will still be some good percentages there and users that will be attracted to get back. But those that want to be sure, won't be taking that risk any longer.

I guess that's why most people prefer centralized finance than "De-Fi". It provides investor protections and guarantees for complete peace of mind. All in exchange of giving away your personal information (KYC). "De-Fi" provides greater privacy and freedom, but it's extremely-vulnerable against hacks, theft, and scams.

If you lose your money in a "De-Fi" platform, it will be gone forever. No way to get it back unless the creators/developers of the platform decide to remedy the situation. So there's that. Hopefully, people's perception of "De-Fi" will change in the future as developers beef up security. We're still in the early beginnings, anyways. :)

True, but to be fair, that applies with anything else in crypto, not just DeFi. For your self-custodial cryptos, you are either counting to:

1. Level of security, that you can provide by yourself
2. Team not rugging you
3. Unexploitable, flawfless code.

You are correct. Those things just weigh so much more in comparison. Because no matter what downsize you are comparing it into, when it comes to "losing all your money", DeFi always loses. And it's not like we couldn't make centralized finance better as well.

There are strengths on decentralization, but real world doesn't operate like that, so it doesn't always fit. We have concentrations of power and wealth, and looks like we are stuck with them for now, because getting rid of them would mean end of the world as we know it, that would need to build from the ground up.

There are also cemented laws that majority of the people wants to keep, to fight corruption etc. And this brings us the necessity of KYC/AML overlapping the decentralization in cryptos. While in the protocol level we can try to go towards decentralization, it will always collapse with real world rules, and the very essence of cryptocurrencies is basically not complying with them.

Also decentralization brings us things we don't like, like freedom to push all sorts of "Oridinals" and scams that are clogging the system and pumping the fees. There's really nothing we want do about those though as they come as a trade-off of being free.

That is exactly the unique reason which has turned me away from using Defining the long term all this time, to be honest. Whenever I have some spare money which I would like to save for the future, I try to find way for it to generate interests, slowly but steadily. Defi was an attractive option for me and I was kind of looking forward to providing liquidity in the form of stable coins to protocolos like Uniswap and Sushi, but with all those hacks and exploits which emptied all the pools of liquidity of other protocols (like Pickleswap) I would not be willing to put my trust in the code of a smart contract I cannot audit myself (I am not a programmer or a coder, so I cannot do it).
I wished those Defi protocols were not so targeted by hackers and thieves as often as they are, so I could sleep tight at night while providing liquidity to their pools at the same time, but It is not possible as it stands today.

Unfortunately, Defi has hurt many people by promising much and delivering week smart contracts, getting broken into by hackers.

also the layer of complexity that DeFi usually has, plenty of people just sticks to exchange, and never venture or explore the on-chain feature at all and this is the reason why exchange such as binance got massive liquidity.

an example of people's fear toward defi hacking is recent news about hyperliquid, just one bad rumour about hyperliquid few days ago already making people scared and withdrawing their money from onchain to exchange. though it doesn't make a dent toward $HYPE price but people are still scared it seems and want to see until the dust settles first.

can't blame them, past hacking were truly traumatizing.

Of course. With crypto, you're responsible of securing your own money. This takes some time and effort to achieve. Not everyone is willing to do their own research to properly secure their crypto assets. It's why most people prefer to leave everything in the hands of a custodian (centralization).

For the unbanked, "De-Fi" does wonders. Especially protocols and dApps without KYC. The whole point is to allow everyone to participate in the digital economy. If "De-Fi" complies with KYC/AML rules, doesn't that make it the same as "Ce-Fi"? As developers continue to improve "De-Fi", flaws or vulnerabilities will be reduced to a minimum. A safer "De-Fi" ecosystem will surely restore confidence among the masses. Who knows? Maybe there's a future for "De-Fi" after all.