DeFi adoption despite security flaws remains confident

Key points: 

• Professionals in the crypto space believe that DeFi will see wider adoption in the future.
• "The key to DeFi adoption among institutional investors is a deep understanding of transparency benefits, trustless approach, and self-custodian technologies" -  Anton Bukov, co-founder of 1inch Network.
• "More insurance protocols are also needed to mitigate concerns related to potential hacks. The growth of such protocols would lead to the organic development and growth of DeFi” - Dmitry Tolok, a co-founder of Primex Finance. 
• “Given the permissionless and digital nature of DeFi, risks will always be present, and users need to understand how to do their own due diligence to minimize the risk they’re taking on” - Alvin Kan, managing director of BNB Chain. 

Since decentralized finance (DeFi) is at the center of various hacks and exploits, some may be discouraged or skeptical about entering the space. However, professionals in the crypto space believe that DeFi will see wider adoption in the future.

From educating institutional investors to removing UX barriers for retail investors, Web3 execs share their thoughts on how to achieve wider adoption of DeFi.

In an interview, Anton Bukov, co-founder of 1inch Network, believes that recent events in centralized finance (CeFi) have highlighted the importance of DeFi. According to the executive, it is only a “matter of time” for the financial system to transition to Web3 solutions. For institutional adoption of DeFi, Bukov noted that it is important to have a deep understanding. He explained:

“The key to DeFi adoption among institutional investors is a deep understanding of transparency benefits, trustless approach and self-custodian technologies.”

The executive also advises DeFi projects on security issues. According to Bukov, conducting security audits is critical. “My advice to any DeFi project is simple — don’t be lazy and do multiple security audits before releasing an update, it will save you a lot of nerves, and likely — users’ funds,” he said.

Dmitry Tolok, a co-founder of Primex Finance, also commented on the topic of DeFi security. According to Tolok, more insurance protocols could help spur DeFi adoption. He explained:

“More insurance protocols are also needed to mitigate concerns related to potential hacks. The growth of such protocols would lead to the organic development and growth of DeFi.”

Tolok also told that a more mature market with more mechanisms to address vulnerabilities will ultimately lead to more investor confidence.

Meanwhile, Alvin Kan, managing director of BNB Chain, emphasized the importance of education in promoting the wider adoption of DeFi. Kan told that more education of users is needed. He explained:

“Given the permissionless and digital nature of DeFi, risks will always be present, and users need to understand how to do their own due diligence to minimize the risk they’re taking on.”

Jay Sullivan, founder of the XSwap protocol, made a similar statement. Sullivan agrees that education is critical to space security. Sullivan emphasized the importance of "teaching investors how to keep their money safe." In addition to retaining talent, the executive said it's also important to teach investors "what to look for" if they want to invest.

In addition to education, the executive noted how regulation will play a role in the wider adoption of DeFi. “With the collapse of several centralized exchanges this year, investors have recognized the importance of DeFi. However, to get institutional investors in, we need to see how the industry develops,” he added.

World Mobile executive Zachary Vann emphasized the importance of improving the user experience. According to Vann, navigating DeFi can be challenging and stressful for novices. “Once the user experience improves and the barriers to entry are lowered, this should help retailers get into DeFi exponentially,” he said.