Decentralization + Finance Ethereum killer application? Li Qiwei: DeFi is terrible

Litecoin founder Charlie Lee has criticized the Decentralized Finance (DeFi) industry, calling it "the worst of the two worlds." Before that, a trader had made a staggering $ 1 million in just two transactions using multiple DeFi protocols.

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According to Babbitt , the trader used a clever set of instructions-all executed in a large transaction-to enable him to take advantage of the current weaknesses of the DeFi ecosystem. Then he repeated the same trick again.

Since then, bZx, which maintains the Fulcrum protocol, has released an update stating that it will use a "manager authority" to correct this situation-exposing that the so-called decentralized protocol is not decentralized at all.

Li Qiwei expressed similar concerns. He said that if most of the DeFi can be closed by the centralized party, then this is "decentralization in progress." At the same time, he pointed out that removing hacking always requires centralized authority, so DeFi is no better than the existing financial system.

But his comments are controversial. Some users pointed out that there are many existing DeFi projects, and he should not evaluate all projects through one or several of them. Most reviewers also acknowledge that DeFi is still an emerging technology that is experiencing growth issues. But in the end, with more and more locked-in funds (which have recently exceeded $ 1 billion), DeFi must do better.

Robert Leshner, founder of Compound, the DeFi loan agreement, said:

"Security is the ultimate goal of financial products. The bZx team has proven many times that they have no ability to protect user funds and should stop operations immediately until the platform can be thoroughly audited."