With over $1 billion total value locked, Decentralized Finance has begun to capture the world's imagination. The dream of an open financial system that is censorship-resistant, trustless and open source seems closer than it has ever been before.
This has attracted innovative founders and development teams to create some groundbreaking new "DeFi" products. However, as we've learned, it's nearly impossible for an ecosystem like Compound or dYdX to come out of the gates in a purely trustless and decentralized fashion. Generally, they start out rather centralized with promises of future decentralization.
As these projects mature and come into their own, it will be the job of the community to ensure that they continue to move toward their ultimate goal. If we don't set the finish line now, and thereby set the expectations that we have of DeFi projects, then we may never end up reaching our fullest potential.
As DeFi grows, we need to ensure that we are consistently building resilience against not just smart contract exploits, but also from criticism. By engaging in this self-policing effort, we can show the world that we are serious about creating decentralized and open financial systems. DeFi Watch will examine projects that adopt the "DeFi" moniker and evaluate whether they have a clear intention of reaching ultimate decentralization.