Interesting problems in DeFi

DeFi has a lot of issues, here are some interesting ones

By Gareth on 19th Dec, 2024

Dead Capital

Ideally we want DeFi primitives to be immutable, however protocols still want to innovate so they inevitably produce upgraded versions of the immutable protocol. This leaves a lot of user's capital in the old versions and with no good notification mechanisms this capital often becomes kind of dead. Is there a general way to solve this problem for all protocols?

AI Asset managers

This is not so much a problem as an obvious future reality. AI will eventually assess the whole market and be able to make the best decisions about where to allocate capital. There will be many AI asset managers. How will they be built? What tools will they need? How will they be distributed/exposed/selected?

Primitive exposure / aggregation

DeFi primitives are fragmented and obfuscated. It's not clear which protocols are truly premissionless and immutable. There should be tooling & aggregation to help businesses build on top of these primitives.

This is a list of problems I find particularly interesting in DeFi. I will be adding to it. If any are particularly interesting to you and you want to chat about it please reach out to gareth@dappness.com