DeFi’s Double-Edged Sword

Unpacking the Features and Risks of DeFi Lending


Decentralized Finance (DeFi ) has emerged as a transformative force—building on conventional financial principles and harnessing the unique properties of blockchains to enable a suite of financial services. Underpinned by its inherent transparency, composability and non-custodial nature, we’ve seen individuals and institutions alike, beginning to embrace it. While DeFi provides several advantages to users, it also opens the door to novel risks. With the increased innovation and access to information for stakeholders involved—hacks, attacks, and exploits have increased in tandem. Therefore, it is paramount to recognize these risks, in order to inform more sound risk-management and strengthen these applications going forward.