DeFi Series #1 : Introduction. Decentralised Finance (DeFi) is a new… | by Srinivas Joshi | Coinmonks | Feb, 2023


Let’s deep dive into DeFi

Why DeFi ?


  1. High Volatility📈: The value of cryptocurrencies, which are often used in DeFi, can be highly volatile. This means that investments in DeFi can be risky and may result in significant losses
  2. Lack of Regulation👁️: DeFi is largely unregulated, which can make it difficult for investors to protect their investments and ensure that they are not being taken advantage of by bad actors.
  3. Smart Contract Risks🤖: DeFi is based on the use of smart contracts, which are self-executing programs that are not easily modified once they are deployed. If there are errors in the smart contract code, it can result in significant financial losses for users.
  4. Limited Adoption🥸: DeFi is still in its early stages of development, and many people are not yet familiar with how it works. As a result, there is limited adoption, which can make it difficult for users to find the liquidity they need.
  5. User Error Risk❌: The decentralised nature of DeFi means that users are responsible for managing their own funds and transactions. This can be risky for users who are not familiar with how DeFi works, as they may make mistakes that result in the loss of their funds.

Further Reading :

  1. The 7 Major Flaws of the Global Financial System
  2. Decentralised Finance vs Traditional Finance: What You Need To Know
  3. How Decentralised Finance Could Make Investing More Accessible

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