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There is a false – and, I would argue, dangerous – belief that in DeFi, strong UX cannot be achieved without some degree of centralization. It is understandable why some people believe this; Centralized platforms such as Coinbase and Binance are known for their intuitive and accessible interfaces for everyday users. However, centralized systems often fall short in areas such as transparency and security.
It is a shame for DeFi projects, who have now heard several times that UX is the missing piece for web3 adoption, to prioritize access over transparency and security to attract users. But those lower security standards are likely to come back to bite them someday.
Whether true or exaggerated, the message that UX is the final piece to Web3's success is pushing too many DeFi developers into thinking they have to sacrifice decentralization, which would face nature and the nature of DeFi. reason to be.
That view is flawed. Decentralization cannot – and does not have to – be sacrificed for a smoother user experience. DeFi can – and must – have both.
A reminder of what happens when we sacrifice decentralization
Centralized organizations in crypto have once again shown their limits. There are scandals like the fall apart of Three Arrows Capital (3AC) and Celsius it showed how centralized organizations fail to deliver the reliability and transparency that consumers expect – and can have disastrous consequences. As we saw with the The FTX exchange rate is going downcentralization allowed for greater volatility, which hid reckless decisions from public view and sent shock waves through the business as billions in consumer assets disappeared. FTX users were blind to the dangers until it was too late.
That is not the case with decentralized protocols, whose transparency keeps them accountable. All transactions are visible on chain, providing insights and promises to users that are not in a centralized peer-to-peer. DeFi protocols such as Aave, which have been operating for almost ten years (since 2017), demonstrate the feasibility of decentralized solutions.
That does not mean that decentralized systems are bad – events like Terra fell in 2022 he showed that decentralization does not guarantee success. But at least when decentralized protocols fail, they fail with transparency. Users and the organization have a level of visibility to hold these systems accountable when something looks wrong.
Decentralization is incompatible with UX
Given the importance of decentralization in DeFi, it is clear that it cannot be sacrificed for better UX. It doesn't have to be either.
We are already seeing proof of that. Smart contract improvements, Layer-2 solutions, and intuitive wallet design are changing DeFi UX without requiring decentralization projects to sacrifice, as we saw with the Uniswap wallet and Unichain L2.
The obvious challenge is getting a strong UX in DeFi is the young age of the industry. Centralized apps, which are often web2 structures with crypto features layered on top, naturally offer a smoother experience today because developers have decades of web2 UX experience to build on. That's not the case with decentralized frameworks, which come with unique scalability, breakage, and compliance issues. These challenges are being actively addressed and resolved.
What are we measuring DeFi against?
How we determine good versus bad UX is also an important consideration, especially when so many criticize DeFi for being too complex. Isn't that the case, though, for TradFi?
Managing multiple accounts across different exchanges or trying to move assets from one transaction to another are not smooth experiences. DeFi aims to simplify these processes through greater interoperability while incorporating the additional benefits of transparency, trust, and user control. Its UX may not yet be the same as the web2 interface, but it's getting closer. As tools and protocols continue to mature, so does the user experience.
It can't be this or that. We need both
The future of finance should not involve choosing between centralized convenience and decentralized security. We must demand both, especially as we recognize the failure of centralized agencies and the need for greater transparency.
The UX gap in DeFi is shrinking. Even if it is not closed tomorrow or the day after, a day will come when users will not have to choose between an easy-to-use platform and security. They will have both, and that is why we must focus our efforts on building that future.
