There is a misconception – and I think a dangerous one – that in DeFi, a robust user experience cannot be achieved without some degree of centralization. It's understandable why some people think so; Centralized exchanges like Coinbase and Binance are known for their intuitive interfaces that are easy for everyday users to access. However, centralized systems often fall short in areas such as transparency and security.

It's tempting for DeFi projects, which have now heard countless times that user experience is the missing piece to web3 adoption, to prioritize accessibility over transparency and security in order to attract users. But those low security standards are likely to come back to bite us one day.

Whether true or exaggerated, the message that user experience is the final piece of web3's success leads many DeFi developers to believe they have to sacrifice decentralization, which goes against the very nature of DeFi and The reason for its existence.

This opinion is flawed. Decentralization cannot—and does not have to—be sacrificed for a more seamless user experience. DeFi can – and should – have both.

A reminder of what happens when we sacrifice decentralization

Centralized entities in the cryptocurrency space have repeatedly shown their limits. Scandals like It collapses From Three Arrows Capital (3AC) and... Celsius Show how centralized entities fail to provide the reliability and transparency users expect – and it can have serious consequences. As we saw with FTX fallCentralization enabled greater opacity, hiding reckless decision-making from the public and sending shockwaves throughout the industry as billions in user assets disappeared. FTX users were oblivious to the risks until it was too late.

This is not the case with decentralized protocols, whose transparency holds them accountable. All transactions are visible on-chain, giving users insights and guarantees not found in centralized counterparts. DeFi protocols like Aave, which have been in operation for nearly a decade (since 2017), show how feasible decentralized solutions can be.

This does not mean that decentralized systems are foolproof, like events Terra collapses in 2022 Show that decentralization does not guarantee success. But at least when decentralized protocols fail, they fail with transparency. Users have a certain degree of visibility and agency to hold those systems accountable when something seems wrong.

Decentralization does not interfere with user experience

Given the importance of decentralization in DeFi, it clearly cannot be sacrificed for the sake of a better user experience. Nor should it be so.

We are already seeing evidence of this. Smart contract improvements, layer 2 solutions, and intuitive wallet designs are transforming DeFi UX without projects needing to sacrifice decentralization, as we saw with the Uniswap and Unichain L2 wallets.

The obvious challenge of achieving a strong user experience in DeFi is that the industry is still at a young age. Centralized applications, which are often web2 architectures with coding features on top, naturally provide a more seamless experience today because developers have decades of web2 UX experience to build upon. This is not the case with decentralized frameworks, which come with unique scalability, shards, and compliance difficulties. These challenges are being actively addressed and resolved.

What do we measure against DeFi?

How to define good and bad user experience is also an important consideration, especially when many criticize DeFi for being too complex. But isn't that the case for TradeFi?

Managing multiple accounts across different exchanges or trying to move assets from one brokerage firm to another are not smooth experiences. DeFi aims to simplify these processes by increasing interoperability while offering the added benefits of transparency, zero trust, and user control. Its user experience may not be on par with web2 interfaces, but it comes close. As tools and protocols continue to evolve, the user experience will evolve as well.

It can't be this or that. We need both

The future of finance should not involve choosing between centralized convenience and decentralized security. We must demand both, especially as we recognize the failure of central entities and the need for greater transparency.

The user experience gap in DeFi is shrinking. Even if it doesn't shut down tomorrow or the next, there will come a day when users don't need to choose between an easy-to-use platform and security. They will have both, which is why we need to focus our efforts on building that future.