1.3 Current problems in the industry

DeFi has created many miracles due to its unique advantages, but with the rapid expansion of the ecology, DeFi and its subdivided NFT, DAO and other fields still have the following pain points to be solved:

-How to achieve the exchange of assets across chains

-Decentralized storage

-How to break through the performance bottleneck of TPS

-The DeFi platform is too simple, which can easily cause congestion Technological breakthrough of Layer 1 & Layer 2 in public chain technology

-Security testing and auditing of the contracts How to ensure the safe and reliable custody of digital assets, to avoid becoming a paradise for hackers

We believe that some technical bottlenecks will be gradually resolved. On the contrary, some non-technical problems may become the biggest challenge of open finance, but also where the business opportunities lie. At present, DeFi is still in the preliminary stage, but some forms and problems have been initially reflected.

For the DEX track, the core of the competition is the near high homogeneity, similar to CEX, in fees and fuel costs. For the Lend & Borrow track, it is fully reflected in theusers chasing high yield.

And centralized exchange (CEX) experience, have to in a close to homogeneity, at the same time close to the completely competitive market (in theory as long as there is network around the world can participate in DEX, and without KYC), can foresee the competition in the future and centralized financial process, into a chase of high yields, resources to advantage project at the same time. Furthermore, due to its own human weakness (greed + risk tendency), such a tendency to pursue high yields will also lead to a second serious problem and a major challenge.

Due to the weakness of human nature itself, the tendency to pursue high yield will inevitably lead to the next major challenge, that is, in this process, there will be a process of bad money driving out good money. Because of the weakness of human nature of greed for profit and risk impulse, the tendency to pursue high yields will inevitably lead to two predictable trends:

-Resources to the superior DeFi, project tilt

-Bad money DeFi will expel the good money DeFi project