Are DeFi projects trustless?

[maydna]

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.

[CoinSmash]

Yes for the most part, trustless.

[gabbie2010]

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.

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.

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.

[3meek]

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!

[JahriMeayer]

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

[themohit]

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!

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

[leea-1334]

DeFi is a tryst less community. What were you thinking think when members locked 11 billions usd worth of token on DeFi, it's an autonomous trust less ecosystem. No one can temper with the funds. Only user who met the conditions can interact with this funds when they interact with the smart contract.
The only challenge here is, computer rarely make errors as humans, sometimes Hackers temper with smart contract when they see a bug and they tend to used that as an advantage to launder funds locked on these smart contracts. Some of these contracts are well audit but still, human makes mistakes. As in the case of Yam, kimchi etc.

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.

[tvplus006]

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

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.

[ven7net]

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:

Decentralized Finance (DeFi) is a decentralized, open source and ecosystem of financial applications, which does not require trust  / services based on public blockchains, predominantly Ethereum. The DeFi ecosystem encompasses all aspects of financial services and transactions, including lending, lending, and trading within decentralized structures. Any Internet user can interact with the ecosystem and manage assets through peer-to-peer (P2P) and decentralized applications (dApps).

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.

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.

[Bitstar_coin]

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.

[deathcode]

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.

[totoy4741]

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.

[peterpanda]

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.

[bitcoin-shark]

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

[Pamadar]

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.

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.

[Jeger.Kiting]

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 ..

[cabron]

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 

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 ..

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

[Bitbtc8]

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

[Galley]

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.

Yes, this is more like a hit and run just like when ICO was still dominating. I think investing in the long term is very risky and it is better if we prefer to consider investing in top coinmarketcap. I hope people are much more careful because the flow like this is the same as before, the late entry and exit will lose a lot

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.

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.

[Abiky]

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:

Decentralized Finance (DeFi) is a decentralized, open source and ecosystem of financial applications, which does not require trust  / services based on public blockchains, predominantly Ethereum. The DeFi ecosystem encompasses all aspects of financial services and transactions, including lending, lending, and trading within decentralized structures. Any Internet user can interact with the ecosystem and manage assets through peer-to-peer (P2P) and decentralized applications (dApps).

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
...

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