Chargebacks911 CEO Monica Eaton was recently invited to share her insights on decentralized finance — or “DeFi,” as it’s often known — in a new guest feature for The Daily Hodl.
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DeFi is one of the hottest topics in finance right now. It’s likely to play a major role in the payments space in the 21st Century. However, as Monica points out, there are some roadblocks standing in the way of a wider embrace of DeFi.
“Consumers will be even more hesitant to accept a new system if it also means losing protection and accepting liability. This was effectively proven at the dawn of the credit card age,” Monica notes. “People needed formalized assurance that card payments worked across the board. That required at least some degree of centralization, as would any consumer protections used with DeFi.”
Hesitance among banks, as well as a lack of clarity regarding government oversight, were also cited as obstacles. But, the answer may be a hybrid approach.
“None of this means DeFi isn’t viable. Rather, it means that some amount of centralization is probably necessary to make it work on a wide scale. And in fact, we’re already seeing de facto centralization popping up, even in arenas considered fully decentralized.”
