Although it has several benefits and it is possible to make lots of money, it can lead to loss of money in several ways:
- If a transaction made in error, it is not possible to get funds back
- Rug pull
- Impermanent loss
- Others.
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One drawback is that it regulars people to be more vigilant with their information related to their wallets and identity. I do believe gas fees are a major drawback in Defi because usually we as people donāt like paying more than we already should.
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I spent a lot of years in large IT shops (DevOps) implementing and operating big player tech. The ability to actually solve problems or innovate is way better in this decentralized crazy world than in the centralized crazy world. I find Discord and Telegram groups more useful then high priced help, but I have been scammed, too.
A drawback maybe not discussed - this is very time consuming, and causes over think! My hope is that intelligent DeFi will reduce anxiety.
Immutability and completely losing funds if they are sent to the wrong address.
DeFi is still new and developing, causing uncertainty and risks.
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There will be steps made by regulators and may effect some of the existing protocols.
Also in the premature phase of the technology there are many players in the space and also new ones coming with new protocols, that makes it even harder to tell the difference and to estimate which one is the right choice.
It is also hard to imagine that most of the population will understand and use the technology with current interfaces and complexity.
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Smart contract bugs that have security vulnerabilitiesā¦potential of losing your funds from hackers
I feel there might be a potential drawback with the quick movement of the space (which might not be a problem in itself) and the fact that apart from platformās like this, there is a big potential of being miss informed or have little ground covered to prevent potential fraud, hacking, ruck pulling etc.
I might be wrong as Iām fairly new to the space, so please correct me, if Iām wrong.
Having a lack of systematic education for the general mass of people, which I assume are mainly due to itās not being in the mainstream as much or fully adapted and established.
Thatās exactly how I tend to feel even for myself. Especially the side of user-friendliness.
The drawback I see is only the following. This industry is relatively new compared to others, by this Im implying that we are a work in progress and mistakes will be made, hacks will occur, bugs will occur. The only way to overcome this inconvenient is to invest in yourself time and money in order for us to succeed.
I totally agree with you my friend. If we want to upgrade or reduce this type of activities
we need to educate everyone, because a lot of people are only in crypto for the gains
Hard to get in contact with support from the network, when u need it, most of the time have to wait for them to fix the bug. Then having differentiate real help from scammers is always challenging.
Agree with u again on this one bro!
One of the main drawbacks that I already identified and was mentioned in previous lesson is how most of defi currently is developed on the Ethereum blockchain. Although Ethereum has been a revolutionary stride for the blockchain community and Defi the gas feeās and speed are not sustainable. In my opinion using Ethereum in the future would be like using my space over Instagram, and Facebook or a blackberry as your current smartphone. Ethereum has been promoting eth 2.0 coming up to 4 years now and I fear it has just been a promotional scam to keep there project alive considering the infrastructure and partnerships that has already been built off it.
Due to my limited knowledge does anyone know of a way to verify that eth 2.0 will ever become reality?
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I think a big drawback is the learning curve that keeps so many people from adopting and using DeFi. The challenge is that it is going to take DeFi becoming more user friendly so that more people are able to use it and for the space and value of the space to grow. However, the more people use it and the more it grows, the smaller the yields and opportunities for massive gains will be, so it is kind of a double edged sword.
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There are so many scammers, as well as DAOs that simply donāt end up working out for one reason or another. Because of this, even if you were to do proper due diligence, there is still no absolute guarantee that the money you place in a DeFi instrument such as a liquidity pool, no matter how safe it may seem, will come back to you. This is mostly because the whole concept and implementation of DeFi is literally still in its infancy.
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Yup, I most definitely agree with you here. The hardest part as well about doing āyour ownā research is that, for me at least, I really donāt know where to start. Thatās why Iām glad to be learning the basics from this course and yāall 
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@MuletownPatriot Totally agree, the learning curve makes DeFi and crypto in general intimidating for many. Because they might not immediately understand it they are quite to dismiss it. I think over time the UX for DeFi will improve a lot. There are already some advantages. For example signing into a website with metamask is a superior experience than a username and password in my opinion.
I think one drawback of DeFi is that even though it is transparent, few people have the skills to understand what is actually happening in the protocols. For most of them, theyāll just have to trust others they know or influencers. I think that ties into the UX and accessibility too.
everyone can check your balance if they know your address