Can DeFi still be trusted??

[danherbias07]

The hype and the name made it look good by putting "decentralized" in it. It's not a new trick as it happened years ago with ICOs using smart contracts.
Some of them are gone without even offering a good explanation about what the crap happened and we can see that now with many DeFi projects that is being created. Not just in the lending section, but also in the gaming industry.
The records are legitimate as decentralized using the blockchain but what about the other parts of it? Going thru cex, swap services, and dex is where I see where the big holes at and they cannot manage to secure it.

[1714531547]

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[Abiky]

Why can DeFi not be trusted? Because you lost money farming due to whales dumping on you? Because some platforms exit scammed or were hacked? Because you got liquidated on a loan? You might as well say that the entire banking industry is a scam. I think the solution lies in DeFi with KYC for developers so that they can't scam, and biometric log in for users so there are no hacks. The answer is the internet computer.

A "De-Fi" platform complying with KYC/AML laws would no longer be decentralized. That's because a third party would be required to collect all of your personally-identifiable information to share it with the government. Besides, KYC will defeat crypto/Blockchain tech's intended purpose (which is banking for the unbanked). If we want decentralized finance to work, KYC must be out of the system for good. Hacks, theft, and other undesired situations will always happen especially when there are millions (if not, billions) of dollars on the line.

It's up to you to inspect the code in order to determine if the "De-Fi" platform's smart contract is as secure and reliable as it claims to be. That is if you have CS knowledge or are a security expert. Developers can easily send their smart contracts for auditing if they're interested in attracting the masses to their project. The whole space is just starting to blossom, so I'd say we should give "De-Fi" more time to mature enough for mainstream use. Just my opinion

[South Park]

Why can DeFi not be trusted? Because you lost money farming due to whales dumping on you? Because some platforms exit scammed or were hacked? Because you got liquidated on a loan? You might as well say that the entire banking industry is a scam. I think the solution lies in DeFi with KYC for developers so that they can't scam, and biometric log in for users so there are no hacks. The answer is the internet computer.

If you want those measures then you should just use banks and be done with this market, biometrics are being pushed as an alternative to passwords but what good can biometrics be since you cannot change them? Once it is leaked out then all your accounts will be at risk and there will not be a way to secure your funds anymore unless passwords are allowed too, in which which case why use biometrics at all if we still need passwords?

[Ludmilla_rose1995]

Why can DeFi not be trusted? Because you lost money farming due to whales dumping on you? Because some platforms exit scammed or were hacked? Because you got liquidated on a loan? You might as well say that the entire banking industry is a scam. I think the solution lies in DeFi with KYC for developers so that they can't scam, and biometric log in for users so there are no hacks. The answer is the internet computer.

If you want those measures then you should just use banks and be done with this market, biometrics are being pushed as an alternative to passwords but what good can be biometrics since you cannot change them? Once it is leaked out then all your accounts will be at risk and there will not be a way to secure your funds anymore unless passwords are allowed too, in which which case why use biometrics at all if we still need passwords?

right, why do biometrics if logging in with a password is still available!

this is still bothering me.. if defi requires KYC does it deserve to be called decentralized again? defi is made to fight against 3rd party (bank) system which requires KYC on every user, I think in the market there are many defi platforms, but only a few are honest.

[leea-1334]

@RussianEnglish: DeFi cannot be trusted because they lie when they say decentralized,,, Who runs the network, who wrote the code, who hosts the servers and backend? Who provides liquidity?

Biometrics? You want more centralization and lack of privacy? Do you think that stops rug pulls? Hacks are only a small percentage of lost money. Scams and rug pulls and exploits by themselves are the majority of DeFi losses.

[justdimin]

@RussianEnglish: DeFi cannot be trusted because they lie when they say decentralized,,, Who runs the network, who wrote the code, who hosts the servers and backend? Who provides liquidity?

Biometrics? You want more centralization and lack of privacy? Do you think that stops rug pulls? Hacks are only a small percentage of lost money. Scams and rug pulls and exploits by themselves are the majority of DeFi losses.

This is the biggest problem when it comes to 99% of the defi projects. I have been part of too many last year, I am a content writer so I didn't really have too much say in it but even the ones that tried to be decentralized, had to do some centralized stuff to make it work or otherwise it would have gone down.

Even the fact that there are people who are spending millions to do marketing for a project is good enough to realize it is not decentralized. Have you seen satoshi spend money on marketing for bitcoin? All in all, I agree that defi projects should be approached with a grain of salt, there could be a few decentralized like cake, but majority is not decentralized at all.

[Teraboy]

Defi can't always be trusted by so many bad stories happened with the defi these days. I meant if we must aware with the fact that if defi can't sustain due to the various reason. Celcius has been giving us a very good lesson even a big defi can't even survive when it was coming to the margin call and low liquidity caused by being drained by someone who has been borrowing bunch of liquidity from the defi itself. I can say that if defi can't fully be trusted but trusting defi is still good for now.

[BuNga_cute]

Defi can't always be trusted by so many bad stories happened with the defi these days. I meant if we must aware with the fact that if defi can't sustain due to the various reason. Celcius has been giving us a very good lesson even a big defi can't even survive when it was coming to the margin call and low liquidity caused by being drained by someone who has been borrowing bunch of liquidity from the defi itself. I can say that if defi can't fully be trusted but trusting defi is still good for now.

It's true that in a bear market situation like this it seems too risky to trust DeFi, especially since crypto trends often change. Many investors experience
bad things when investing in DeFi today, because investing in bear markets is very risky. So we really should invest safely by only trusting Bitcoin
for now, don't be too hasty in investing in DeFi in a bear market situation. It's better if we prioritize investing in Bitcoin and for DeFi I suggest for now
we can just monitor its movements. Even because the bear market has been going on since the beginning of this year, the majority of DeFi have not
shown satisfactory performance so far. So indeed in a bear market situation we have to be more careful in making decisions, don't let us regret making
the wrong decision. It's better to wait for the bull market to come if we want to start trusting DeFi again, because during a bull market the chances of
DeFi pumping are much bigger.

[leea-1334]

@RussianEnglish: DeFi cannot be trusted because they lie when they say decentralized,,, Who runs the network, who wrote the code, who hosts the servers and backend? Who provides liquidity?

Biometrics? You want more centralization and lack of privacy? Do you think that stops rug pulls? Hacks are only a small percentage of lost money. Scams and rug pulls and exploits by themselves are the majority of DeFi losses.

This is the biggest problem when it comes to 99% of the defi projects. I have been part of too many last year, I am a content writer so I didn't really have too much say in it but even the ones that tried to be decentralized, had to do some centralized stuff to make it work or otherwise it would have gone down.

Even the fact that there are people who are spending millions to do marketing for a project is good enough to realize it is not decentralized. Have you seen satoshi spend money on marketing for bitcoin? All in all, I agree that defi projects should be approached with a grain of salt, there could be a few decentralized like cake, but majority is not decentralized at all.

I get that projects need to be centralized and need to do marketing,,, that is absolutely fine, but no need then go about and say decentralized this and defi and gamefi that and everything.

And another thing no need to lie about needing money for development. Bitcoin and Ethereum all started out developing without money so we know that is bullshit.

The problem I have is projects raise money to do 99% marketing and to buy coke to snort  

[LUCKMCFLY]

I'm just saying something, if DEFI can survive this market crash it is because it can cope very well with everything that its ecosystem represents, now, when the metaverses begin it is obvious that ecosystems based on Defi will have a great respite because they will enter a universe where many will have access and will know its concept, so on this side I hope that Defi does survive, I hope that BTC does not continue to fall so that it gives a good chance to grow to nascent projects, and strengthen those that are already developed.

[AmoreJaz]

Defi can't always be trusted by so many bad stories happened with the defi these days. I meant if we must aware with the fact that if defi can't sustain due to the various reason. Celcius has been giving us a very good lesson even a big defi can't even survive when it was coming to the margin call and low liquidity caused by being drained by someone who has been borrowing bunch of liquidity from the defi itself. I can say that if defi can't fully be trusted but trusting defi is still good for now.

any platform or network can't be trusted as they are vulnerable to either internal attacks or outside attacks. the security depends on how the team will continue to update their security protocols as hacking softwares are getting sophisticated everyday. just like any new network technology, defi can't avoid these attacks. hence, customers should always be cautious in storing their funds or managing their funds via defi platforms.

[South Park]

Why can DeFi not be trusted? Because you lost money farming due to whales dumping on you? Because some platforms exit scammed or were hacked? Because you got liquidated on a loan? You might as well say that the entire banking industry is a scam. I think the solution lies in DeFi with KYC for developers so that they can't scam, and biometric log in for users so there are no hacks. The answer is the internet computer.

If you want those measures then you should just use banks and be done with this market, biometrics are being pushed as an alternative to passwords but what good can be biometrics since you cannot change them? Once it is leaked out then all your accounts will be at risk and there will not be a way to secure your funds anymore unless passwords are allowed too, in which which case why use biometrics at all if we still need passwords?

right, why do biometrics if logging in with a password is still available!

this is still bothering me.. if defi requires KYC does it deserve to be called decentralized again? defi is made to fight against 3rd party (bank) system which requires KYC on every user, I think in the market there are many defi platforms, but only a few are honest.

It is not surprising at all that those supposed decentralized networks are in fact centralized as this is something which happens with regular cryptocurrencies as well, as an example out of the current top 10 coins 5 are centralized and maybe there are a few more which are centralized too but I do not know enough about them to know for sure, so it is not surprising this is happening as well with the DeFi coins, however this can be used as a measure stick to know which DeFi coins are centralized or not, since if a DeFi coin was really decentralized then they will have no reason to ask for your personal information at all.

[ilovealtcoins]

another bad day for inverse finance, they got exploited for $1.2 million

Exploiters seemed to use a flash loan attack to trick the protocol and steal more than 53 bitcoin, worth $1.1 million, and 10,000 tether (USDT), a stablecoin backed on a 1-1 basis with U.S. dollars. The exploit comes just over two months after attackers stole $15 million worth of cryptocurrencies from Inverse Finance in a similar attack, as previously reported.

Blockchain data apparently shows the exploiters flash-borrowed some 27,000 wrapped bitcoin from lending protocol Aave to conduct the attack. The funds were routed through swap service Curve for various stablecoins before being used to remove DOLA, a stablecoin, from Inverse Finance pools.

An address tagged as “Inverse Finance Exploiter” on blockchain analysis tool Etherscan apparently sent 900 ether, worth $1 million, to privacy mixer Tornado Cash following the exploit, data shows.
Tornado Cash allows users to mask addresses and is sometimes employed by attackers to hide their stolen funds.

https://www.coindesk.com/tech/2022/06/16/defi-protocol-inverse-finance-exploited-for-12m/

due to this news INV token trading volume dropped drastically (72%).

whether vulnerabilities to exploits in DeFi make investor funds insecure?  if you have investment in DeFi token please give your opinion!!

Defini is going through a hard time at the moment, but it won't die, that's a part of the story of crypto, it has to go through hardships to become better and more mature. In many ways, Defi is like a bank in our lives, except that it is decentralized rather than centralized like a bank. defi is facing a lot of big problems like getting hacked but I believe it will recover in the future.

[Abiky]

any platform or network can't be trusted as they are vulnerable to either internal attacks or outside attacks. the security depends on how the team will continue to update their security protocols as hacking softwares are getting sophisticated everyday. just like any new network technology, defi can't avoid these attacks. hence, customers should always be cautious in storing their funds or managing their funds via defi platforms.

Exactly. Nothing is 100% secure in this world. There will always be room for failure. It'll be up to developers and security researchers to constantly update software algorithms in order to stay one step ahead of the latest threats. "De-Fi" platforms are often open source, so it's easy to identify bugs and/or flaws in the system. Some platforms are more secure than others due to rigorous testing by developers, but none of them are immune from external attacks.

You'd have to keep in mind that using "De-Fi" platforms is entirely your responsibility. That's because of the way they're designed (no middleman, only you control your crypto funds with a private key or seed). They're not like banks which are regulated and monitored by the government. Users of "De-Fi" platforms must first do their own research before making any deposit. If you want to play it safe, just spread your investment across multiple "De-Fi" platforms in order to minimize risks of loss. I'd trust "De-Fi" more than banks, simply because it gives me power/freedom to do anything I want with my money. But not everyone will find "De-Fi" attractive. Who knows what the future will hold for this emerging industry? Just my opinion

[Ludmilla_rose1995]

****

Defini is going through a hard time at the moment, but it won't die, that's a part of the story of crypto, it has to go through hardships to become better and more mature. In many ways, Defi is like a bank in our lives, except that it is decentralized rather than centralized like a bank. defi is facing a lot of big problems like getting hacked but I believe it will recover in the future.

emm, I think what you said is quite correct, we are actually still very early in adopting the concept of DeFi. there are still a lot of adjustments that need to be fixed here and there, but DeFi will be better if the tokens in circulation are stable-token so that users don't lose out because of price fluctuations that occur inside, and the locking of investors' funds must also be fixed, so that investors early on when doing price manipulation tricks by buying or selling lots of the DeFi tokens they bought very early!

[o48o]

I find it quite funny that this topic is trending at the same time when people are asking that should they avoid CEX:es because of FTX and are saying we should use DEX:es.
But answering to this question: Word "trust" isn't something that has to be absolute. We know there are risks in both and this is why the prices move. There's ton of risk of many kind involved in investing cryptos / using cryptos.

However i want to support DEXes. I am not keeping much of my money in liquidity pools or something like that. I keep list on which wallet is connected to where so i don't keep too much money on any wallet that could be compromised

[coinerer]

defi was once a hype and almost all projects developed in Defi were considered trustworthy and everyone invested more or less here. But now Defi is not considered very trustworthy.  Because many attacking and hacking incidents are happening in Defi now, Defi should be used with caution. I personally don't use Defi now and don't trust Defi very much

[|MINER|]

defi was once a hype and almost all projects developed in Defi were considered trustworthy and everyone invested more or less here. But now Defi is not considered very trustworthy.  Because many attacking and hacking incidents are happening in Defi now, Defi should be used with caution. I personally don't use Defi now and don't trust Defi very much

Both defi and cefi in cryptocurrency should not be considered 100% trust worthy, and shouldn't invest all fund in one . Because risk is every here if wanna trust to cefi then you should also remember the previous incident and also same goes to the defi . So I think the best would be to split all the funds and invest them everywhere as per a good strategy with remember that's " invest as much as you afford to loose".

[vv181]

~we are actually still very early in adopting the concept of DeFi. there are still a lot of adjustments that need to be fixed here and there,

One thing lacking about Defi is the upper layer of the ecosystem to access Defi is not wholly "decentralized". If the platform exists over a somewhat less decentralized coin, it reduces the term of decentralized itself. Unfortunately, I don't see many majority Defi platform are concerned about it.

DeFi will be better if the tokens in circulation are stable-token so that users don't lose out because of price fluctuations that occur inside, and the locking of investors' funds must also be fixed, so that investors early on when doing price manipulation tricks by buying or selling lots of the DeFi tokens they bought very early!

If we are sticking to the "Defi" term, relying on stablecoin makes it worse. Besides, if the pool itself has a few selections of token availability, and especially if it's only a stablecoin, the platform will be lacking any interest due to a lack of fluctuation within the price. Plus, early investor deserved it simply because they are being early. If it is still prone to manipulation, the problem is not on the investor side.

[Abiky]

I find it quite funny that this topic is trending at the same time when people are asking that should they avoid CEX:es because of FTX and are saying we should use DEX:es.
But answering to this question: Word "trust" isn't something that has to be absolute. We know there are risks in both and this is why the prices move. There's ton of risk of many kind involved in investing cryptos / using cryptos.

However i want to support DEXes. I am not keeping much of my money in liquidity pools or something like that. I keep list on which wallet is connected to where so i don't keep too much money on any wallet that could be compromised

DEXs have so many limitations which make them look inferior to their centralized counterparts. Why would people use something that's slow, has low liquidity, and requires some level of technical knowledge (especially keeping self-custody of your coins)? We can't think about DEXs replacing CEXs if such limitations exist. While developers have been improving DEXs over time, they still have a load road ahead before they become mature for mainstream use.

At least, we're not tied to a single option. We have many alternatives to choose from, so it's likely crypto will move on from the FTX collapse and emerge bigger and stronger than ever. Who knows what the future holds for crypto/Blockchain tech? Just my thoughts