Despite nearly six years passing since the inception of decentralized finance (DeFi) in 2017, it’s still experiencing child-like growing pains in 2023. DeFi underpins many Web3 properties which experience hacks and exploits weekly. Multi-million dollar exploits remain commonplace. In truth, the industry has struggled with basics — starting with its name. Whether DeFi has ever achieved financial “decentralization” is debatable. Several Securities and Exchange Commission (SEC) officials are wary of the word: Hester Peirce has flagged projects as “decentralized in name only,” and Gary Gensler has repeatedly questioned the word’s relevance. “Everything other than Bitcoin you can find a website, you can find a group of entrepreneurs, they might set up their legal entities in a tax haven offshore, they might have a foundation, they might lawyer it up to try to arbitrage… But at the core… these tokens are securities because there’s a group in the middle and the public is anticipating profits based on that group.” SEC Chairman Gary Gensler on February 23, 2023 in New York Magazine
For example, DeFi giant Solana has been offline at least 20 times – putting millions of open trades at the mercy of a handful of centralized developers to resolve. Specifically, Solana founder Anatoly Yakovenko once revealed that just 20 people were active contributors to Solana’s code — 15 of whom worked for Yakovenko at the time.
Full opinion : Top DeFi projects move further from decentralization in 2023.
