DeFi aggregation for mass adoption.
The DeFi revolution is transforming the financial landscape and giving people more control over their assets. However, the complexity of DeFi remains an obstacle to mass adoption. To overcome this, we need more DeFi aggregation services.
DeFi aggregation is when platforms combine different DeFi protocols to create a more efficient and complete service for users. This improves the user experience by increasing efficiency and reducing complexity. Aggregation can also unite different communities around platforms, giving DeFi ecosystems more visibility, strength, and choice without taking away from the underlying protocols.
Aggregation is like building with LEGO blocks, where each DeFi protocol represents a block that can work together to form a structure. Without aggregation, using DeFi can be like building a LEGO model with no instructions. Aggregation is not just useful for DeFi, as tools such as NFT marketplace aggregators can also make other aspects of Web3 more user-friendly and efficient.
Aggregators make the user experience of DeFi smoother, more comparable to traditional finance, and retain full custody of funds. Investors may no longer need to choose between higher yields and a straightforward user experience. Aggregation simplifies usage and enables access to returns with the least amount of clicks and knowledge possible, allowing anyone to participate in this new financial world.
- Atomic Wallet users hacked for $35M worth of various cryptocurrencies.
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- Bitcoin’s price rose and is now hovering over $27K as investors ignore the hot jobs data.
Making DeFi more secure
Decentralization is key
It is becoming increasingly difficult for ordinary people to find a safe place to keep their hard-earned savings. Banks have traditionally provided this security, but recent scandals have eroded trust. DeFi provides a revolutionary solution by allowing users to have full custody over their assets, but many people are hesitant to use it due to concerns about user experience and security.
However, trustworthy aggregation services can address these concerns. If aggregators provide a streamlined user experience and only include audited and secure protocols, it becomes easier for users to switch from traditional finance to Web3.
Overcoming DeFi challenges
Current challenges with DeFi security include the risk of impermanent loss, hacking, and too much slippage. These issues require further research, development, and innovative solutions to overcome. Aggregation tools show promise in this area as they can prioritize the most efficient and secure pathways.
Insurance and risk management
Decentralized insurance protocols can play a major role in addressing investor concerns and promoting adoption. Insurance aggregators make it easy to manage risk while still benefiting from blockchain technology. Although DeFi insurance requires investors to give up a small portion of their returns, the overall performance of decentralized finance is still more attractive than traditional banks. Additionally, this extra layer of security can help onboard more users to Web3.
Aggregating a brighter future
DeFi offers investors a chance to gain independence and earn greater yields by creating their own self-hosted, secure DeFi “bank account” that is protected from banking failures. While mastering a range of DeFi protocols may be challenging for most people, aggregating multiple high-quality platforms can make DeFi more accessible, efficient, and ready for mainstream adoption.
Wolfgang Rückerl is the CEO of Istari Vision and Entity.global. He specializes in Web3 startups, DeFi, and GameFi.
This article was published through Cointelegraph Innovation Circle, a vetted organization of senior executives and experts in the blockchain technology industry who are building the future through the power of connections, collaboration, and thought leadership. The opinions expressed do not necessarily reflect those of Cointelegraph.
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