The DeFi North Star (updated 9 Mar)

The DeFi North Star consists of five values that should be able to be measured in every DeFi project, product or application.

DeFi Watch plans to evaluate key DeFi products based on these values and report back on its findings.

✔️ Trustless We will look for any situations where trust in the core team is required. This can include a variety of things incl admin key powers, changeable oracles, off-chain transactions, funds custody, token governance oligarchies, balance slashing ability and more.

✔️ Open Source & Transparent We will look at whether all related code is open sourced, including not just smart contract code but also any other product-level app code through which finances will run. We'll also look at whether or not all features are documented transparently.

✔️ Permissionless We will look at the interoperability of the DeFi product and whether or not access to the DeFi product can be limited by the core team or anyone else, including governments/regulators.

✔️ Censorship-Resistant We will look at whether or not the core team or anyone else, including governments/regulators, have the ability to censor transactions or freeze funds that are flowing through the DeFi product at any given moment based on a user's identity.

✔️ User Sovereignty We will look at whether or not the user is always in control of his/her funds, or if the core team or anyone else has the ability to affect the contract in a way that could limit the user's ability to withdraw funds, such as during an exploit or other crisis.

The goal here is not to demand that projects meet any unrealistic criteria or set some unreachably high bar.

It is to provide a measuring stick for those who are passionate about decentralization to be able to properly gauge each DeFi project.

Without a North Star to shoot for, we can't possibly know how close (or far) we actually are from decentralization.