The Rationale for Making DeFi Available to All

DeFi has the potential to make life better for everyone. But only if it works. Sure it sounds like a truism, but at this crucial stage of DeFi development we need to set our sights on how this technology can and will be leveraged for a mass audience. Yes, there are some cool use cases already in place, and yes the technology is often breathtaking, but while DeFi remains a niche area its potential is wasted. Why should we make DeFi accessible? Blockchain is a difficult topic for most people to think about. Maybe understandably so, it is a marked shift from the centralised systems most people are used to and utilises some pretty cutting edge technical concepts to achieve true peer to peer functionality. But we can’t lose sight of the fact that for decentralised technology to truly ‘work’ it needs to be accessible to everyone. For DeFi this is particularly the case as it requires users to hold total trust in the system (it is their money after all) but also offers immediate real-world benefits. So why is DeFi such an exciting tool for the population at large? Speeds up innovation through competition and composability. Reduces friction in finance and reduces overheads in cost. Makes things more accessible and fairer for everyone. However, there are some significant obstacles to realising these possibilities. The main ones are: DeFi is not decentralized if only a small number of geeks can use it. It’s not useful if it is difficult to rely on the economics. It’s not useful if it’s not safe. How do we make it work? Proposing the 3 S’s of DeFi DeFi needs to work for everyone for it to truly scale, but what can be done now in order to allow that level of access? The rule of the 3 S’s provides a good baseline guide for how to frame DeFi development. They are: Security The first S for security may feel like an obvious one. It’s certainly a topic much discussed by the developer community and for those in blockchain, it requires carefully planning code quality, the depth of network decentralization, the security guarantees that the network provides, the cost to attack the network to name just a few aspects. The foundational pieces (such as secure networks and well-written code) are of course essential for security, but only focusing on these dev centric areas risks missing critical security factors. A really good example of this is “password requirements”. Remember those annoying websites that make you use a number and a capital and a special character and change your password every 30 days etc. Objectively this seems more secure to an engineer and in a perfect world, it helps. However, it totally ignores user behaviour and we end up with people choosing easy ones to guess and remember that meet the requirements like Passw0rd1!. In fact, it turns out long phrases that are easy for users to remember offer overall better security. When looking for true DeFi security there are a few things to check for: Well written opensource audited code The security budget of the network economics How GAS plays a role in the network How users will interact with the security model. Safe Safety goes beyond security in that it considers how to manage breaches and other network disasters; something that is extremely important but often overlooked in the crypto space. The concept of safety accepts that bad things will happen, no matter how hard you try to prevent them, or how secure you think your code is. Getting adoption for everyday end users relies on solving safety as well as security. For an example of how Safety works with Security we can look at Insurance and Risk management. Bridge Mutual offers insurance to protect user’s funds in the event of a security failure. It’s an obvious but important thing we need to do more of. Imagine if your deposits at the bank weren't protected when a robbery occurred. This used to be the case, now we have insurance. In a similar vein market factors can impact safety for users. Volatility can put smaller players who rely on small incomes at risk when there are wild swings in value. Simple The last point is Simplicity. Security and Safety are important but if the systems aren’t easy for users to engage with then they won’t be used and therefore won’t have an impact. When put together, Security, Safety and Simplicity can help us to deliver an overall more secure user experience.