Despite initial successes, DeFi vaults have not lived up to user expectations. This article examines the main shortcomings and the need for improvements in this sector.
Trust in DeFi Vaults
While DeFi vaults have reduced the need to trust individual managers, they have created a new trust issue. Users rely on the creators of the strategies, who are often unknown. Many platforms fail to verify managers, complicating the understanding of who is managing investments.
Challenges in Selection and Risk Management
Choosing from available DeFi vaults can be a complex task. Platforms often do not offer enough curation. This leads to users struggling to find appropriate strategies, resulting in many good ideas going unnoticed.
Need for Better Coordination
The current DeFi model focuses on automation but does not consider the need for coordination between investors and vault managers. Improving infrastructure and creating verification mechanisms will allow users to make informed choices.
DeFi vaults have been an important step in the evolution of financial technology, yet for full development, it is crucial to recognize the shortcomings of the current model and devise new approaches to enhance trust and security.
