DeFi has the potential to solve key challenges around; centralized control, limitations in access, inefficiency, interoperability, and the opacity that are often hallmarks of the incumbent centralized financial system.

Centralized control was clearly demonstrated by the collapse of FTX. A centralized entity controlled user funds, and used, and lost user funds. In many cases they also limited who could access certain services and instruments, based on for example geographical location. Both inefficiencies, interoperability and opacity were rolled up into one and clearly demonstrated in the case of FTX with a lack of proper accounting, flow of funds and transparency of reserves.

This is just one example that is reflected across all manner of centralized financial infrastructure. The intention of DeFi was to replace this inefficient infrastructure with decentralized smart contracts. Clearly we are not there yet. DeFi itself is still riddled with problems from smart contract risks to bad actors. It is an ideal time to focus the mind and push DeFi forward.