About DeFi Watch

DeFi Watch is not about stopping people from releasing dangerous, reckless code.

It is about making sure that users know that it's dangerous, reckless code before they drop their money into it.

Transparency is DeFi Watch's primary objective.

DeFi Watch operates under these core beliefs:

  • Development activity on an open and permissionless blockchain like Ethereum cannot be adequately regulated.
  • Each DeFi user has a different risk tolerance and should have the information necessary to make their own personal risk assessment for each DeFi product that they use.

Risks that require transparency may include:

  • security risks
  • economic risks
  • regulatory risks
  • and more

In cases where this transparency is not happening, whether intentionally or inadvertently, DeFi Watch alerts and educates DeFi users.

Risks do not stop at the obvious. Projects should proactively disclose "worst-case scenarios" based on the unique risks that their project entails.

For example:

  • Projects that use admin keys should reveal the risks of a regulatory attack based on the laws the keyholders are subject to.
  • Projects that have large amounts of systemic risk should demonstrate what would happen if one of its layers were to be compromised.
  • Projects that rely heavily on game theory should explain what would happen if the rules of the game provide unexpected, competing incentives.

Providing this level of transparency requires a DeFi project to be humble and capable of self-critique. This is a feature, not a bug. Any DeFi project team that is incapable of doing this has a much greater likelihood of not understanding the risks themselves, potentially leading to disaster.