Industry execs voice confidence in DeFi adoption despite security flaws
With decentralized finance (DeFi) being a hub for various hacks and exploits, some may feel discouraged or wary of entering the space. However, professionals within the crypto space are confident that DeFi will have broader adoption in the future.
From educating institutional investors to eliminating user experience barriers for retail investors, Web3 executives shared their thoughts on how broader DeFi adoption can be achieved.
Speaking to Cointelegraph, Anton Bukov, the co-founder of 1inch Network, believes that recent events in centralized finance (CeFi) have highlighted the importance of DeFi. The executive believes it’s just “a matter of time” before the financial system switches to Web3 solutions. In terms of institutional DeFi adoption, Bukov noted that it’s essential to have a deep understanding. He explained that:
“The key to DeFi adoption among institutional investors is a deep understanding of transparency benefits, trustless approach and self-custodian technologies.”
The executive also gave advice to DeFi projects in terms of security issues. According to Bukov, performing security audits is of utmost importance. “My advice to any DeFi project is simple – don’t be lazy to do several security audits before releasing any update, this will save you a ton of nerves and highly likely – users’ funds,” he said.
Dmitry Tolok, the co-founder of Primex Finance, also commented on the topic of DeFi security. According to Tolok, more insurance protocols may help push the adoption for DeFi. He explained that:
“More insurance protocols are also needed to mitigate concerns related to potential hacks. The growth of such protocols would lead to the organic development and growth of DeFi.”
Tolok also told Cointelegraph that a more mature market with more mechanisms that deal with vulnerabilities will eventually lead to more investor confidence.
Related: A year after Taproot, Bitcoin community works to unlock its DeFi potential
Meanwhile, BNB Chain executive Alvin Kan highlighted the importance of education to spark broader DeFi adoption. Kan told Cointelegraph that there needs to be more education for users. He explained that:
“Given the permissionless and digital nature of DeFi, risks will always be present, and users need to understand how to do their own due diligence to minimize the risk they’re taking on.”
Jay Sullivan, the founder of XSwap Protocol, also echoed the same sentiment. Sullivan agrees that education is vital for keeping the space safe. Sullivan highlighted the importance of “teaching investors how to keep their funds safe.” Apart from storage, the executive believes that it’s also important to teach investors “what to look for” when looking to invest.
Apart from education, the executive also pointed out how regulation will play a role in broader DeFi adoption. “With the collapse of several centralized exchanges this year, investors have seen the importance of DeFi. However, for institutional investors to enter, we need to see the industry evolve,” he added.
Zachary Vann, a World Mobile executive, highlighted the importance of enhancing user experience. According to Vann, navigating DeFi can be challenging and overwhelming to newbies. “Once the user experience is improved and the barrier to entry reduced it should help exponentially the amount of retail coming into DeFi,” he said.