Optimizing the Decentralized Finance Space for Newcomers

UNCX Network
4 min readApr 16, 2024

The bull run is here. With it comes many of the same questions that people have had in the past. The main issue we still face is, “How do we attract new liquidity into DeFi?”

Decentralized finance (DeFi) promises a future where financial systems are open, trustless, and directly controlled by the individuals they are intended to serve. But as the hype around DeFi grows, it begs another very important question — are the key players in this financial revolution truly optimizing the space for new entrants?

Antoine recently chatted with Bruno Maia from Cartesi. Together, they explored what it takes to truly invite and engage newcomers in the DeFi sector. We’ll look at the crucial facets of blockchain infrastructure and the brighter path ahead for DeFi.

The Backbone of DeFi

The basics of DeFi revolve around the ideas of decentralization and transparency. Blockchain infrastructure is what makes the magic happen. When properly optimized, blockchains provide a public ledger that records all transactions, ensuring they are auditable and tamper-proof.

Integrating with blockchains is not always straightforward. Nor is it always easy, especially for those coming from more traditional financial systems. High transaction fees, network congestion, and complex wallet management can quickly become overwhelming hurdles for newcomers.

Bruno had this to say about blockchain infrastructure’s past, present, and future: “I’m super positive because we’re planting the seeds to unlock infrastructure limitations. We’re increasing the computational capacity with protocols. Cartesi is increasing data storage capacity, for example. We are also enhancing other parts with sequencers to achieve a lower latency. It will eventually open more use cases for blockchain. You’re going to see other use cases rather than the defi currency.”

Simplicity and Scalability Will Be the Key Drivers of DeFi Adoption

Complexity in DeFi is a barrier. There are so many platforms, protocols, and non-standardized user experiences. What’s more, the prevailing narrative of high risk and even higher potential rewards can deter cautious investors.

Improving simplicity involves creating more intuitive applications that abstract away complex blockchain interactions. However, developers must not compromise on security or the decentralization principles that are core to DeFi’s value proposition.

Here is Bruno’s take: “Whether it be B2B or B2C, the end users want something simple. They don’t even have to know that there is a blockchain underneath. That’s why, for example, the next batch of products that we’re working on involves providing services as a service. We want to have versions of a product with fewer buttons and options.”

Scalability, on the other hand, involves ensuring that DeFi platforms can handle a growing number of users and transactions without becoming slow or prohibitively expensive.

This means exploring layer-two solutions, as well as novel consensus mechanisms beyond Proof of Work, to build a robust infrastructure capable of supporting a global user base.

The Balancing Act of Trust in a Trustless System

DeFi platforms operate on the promise of trustlessness, secured through the use of smart contracts that execute transactions without the need for intermediaries.

However, this concept of ‘trust in code’ can be a tough sell to newcomers who are accustomed to traditional systems with legal and institutional mechanisms in place for dispute resolution.

“That is the fundamental risk of this whole ecosystem. It can collapse if you don’t trust the system because you remove central authority. The collective of this protocol performs the authority in a decentralized fashion. If that mechanism fails, you don’t have anything,” said Bruno.

That can sometimes be a hard pill to swallow for people getting into the space for the first time.

Platforms and their developers are responsible for making this easier. There was a time when a dev’s job was solely to write code. That isn’t going to cut it if global adoption is the goal.

Security, user-friendly explanations of platform operations, and providing the tools and knowledge investors need to safely operate within the DeFi space must be priorities.

The effort spent fostering trust within the DeFi ecosystem is always rewarding. The more trust there is, the more engagement and innovation we see from existing players and those onboarding into the system.

UNCX and Cartesi Are Building the Future of DeFi

Optimizing the DeFi space is about attracting new users and providing a genuinely inclusive and empowering financial ecosystem. By focusing on some of the elements discussed today, DeFi can set the stage for a more open and equitable future of finance.

The road ahead is challenging, but protocols like UNCX and Cartesi are pioneering the solutions. The potential rewards — a more democratic financial ecosystem, access to financial services for the unbanked, and an environment that spurs unprecedented innovation — make the effort more than worthwhile.

The UNCX Network team

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