5 Main DeFi Problems

Although the Defi market grows like the bean tree in the famous fairy tale, there are more than enough problems in this market.

Yes, in DeFi you can get a 300% return on annual investments, but you can also lose everything. My task is to help you avoid mistakes and to make life easier for a beginner in this interesting world of Decentralized Finance. Everyone can choose whether to take risks or not.

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But if you are still determined to invest by yourself, here are 5 main issues with DeFi. After this, you will be prepared:

1. Scalability
This refers to the scalability of the Ethereum blockchain network.
There are two problems here:
a) it takes a long time to confirm transactions, about 1 hour.
b) the transactions during congestion are very expensive, approximately $5–25 for each transaction, and each investment should include 2–4 transactions.
The cheapness and speed of use should be one of the main advantages of DeFi over CeFi (centralized finance).

2. Problems of smart contracts
Any mistake in the smart contract can lead to the loss of money. Only a minority reads them, and even among them not so many people understand them. In addition, contract creators rarely do high-quality audits of their smart contracts.

3. Low compatibility
There are some very profitable DeFi projects but they are isolated from the general ecosystem until the interaction between platforms becomes easier. So far, this is a major issue and the solution provided at the moment is not effective.

4. Lack of insurance
An important point to remember is the ability to protect investors’ money from hacking and fraudsters. Unfortunately, insurance is just starting in the DeFi ecosystem and scammers regularly hack entire platforms with the accounts.

5. Centralization
It may sound absurd, but some Decentralized sites may turn out to be Centralized. This happens when the founder of the site owns the main amount of tokens and controls the management, which can lead to manipulation of the token price. Just as the case with Sushiswap, every participant except for one person, the founder of the website, lost their investments.

In conclusion, we can deduce that only a person with profound expertise and good technical knowledge can financially succeed on DeFi. There are too many risks for beginners to make mistakes in such an imperfect, young, but very promising industry in the world of new finance.

That is why my team created Defi investment fund eztrade24.com

Where everyone can start earn on Defi projects without any expirience, thanks to our deep knowledge of Defi you can earn up to 30% per month, depends on deal quality we can find onthe market.

Click eztrade24.com join to our community of Defi investors. We have a live chat between all registered members where you can ask any question you need.