I’m frequently hearing claims about the potential growth of DeFi, yet I struggle to grasp how it could ever gain widespread adoption. More specifically, I can’t envision my family and friends navigating the convoluted process that current DeFi applications require for user experience and onboarding.
In traditional fintech platforms like Wealthfront or Robinhood, the process involves straightforward KYC verification and linking a bank account through ACH, allowing users to start earning interest quite easily.
On the other hand, diving into the DeFi world demands users to grasp a host of complex topics such as wallets, addresses, blockchain networks, transaction fees, and various protocols just to earn yield on a stablecoin. Users have to go through intricate setups, including KYC, transferring funds, purchasing coins, waiting for transactions to clear, moving assets to wallets, and engaging with lending protocols, all of which can seem intimidating for newcomers. Some have even suggested setting aside funds for potential losses, calling this approach a type of “tuition.” This, despite not being overly adventurous—simply seeking stablecoin yield.
Is filtering out individuals from risky pools through complexity a beneficial approach? Perhaps. However, considering the presence of stablecoins and established protocols like Aave, alongside the high yields experienced during bull markets, this moment might be ripe for DeFi yield to enter the mainstream. Yet, I am perplexed as to why there aren’t clearer pathways to access it.
Is there an inherent issue that makes simplifying DeFi processes to be on par with platforms like Wealthfront or Robinhood impossible for obtaining 8-10% “safe” yields? If so, does this mean we are resigned to only attract existing crypto enthusiasts? I would appreciate insights into whether this remains a substantial barrier to entry.