Decentralized Finance as it stands at the moment is a bit of a misnomer.

Most of the decentralization efforts have gone towards satisfying regulatory requirements related to custody/handling of user funds. While this does mitigate the majority of counter-party risks, it’s not the panacea worthy of the DeFi moniker.

The common model in the space is a decentralized smart contract back-end with website crucial to usability hosted by the team. Now I'm no Fed, but if the key to a protocol’s continued use was a single website developed, maintained & hosted by the founding team, I might start to wonder if it was decentralized as they claimed. And before you start: No. Etherscan’s write contract page is not an alternative dApp UI.

It’s an easy oversight to make, because the website isn't technically touching the funds. The website only displays info and helps the connected wallet prepare the transactions it makes with the contracts, right? You are making the assumption that the regulator who’s out to get you will understand that distinction or care.

So where do you go from here? Let take a look at some examples of decentralized UIs.

DxDAO lives up to to the DAO part of its name. All of the DAO’s web assets are hosted by a decentralized file storage system, called IPFS but not only that, they solely utilize Ethereum Name Service (ENS) as their public URL. By combining IPFS + ENS they’ve effectively removed almost all centralized dependencies in-between their users and the protocol.

Recently Uniswap Labs released a post about further decentralizing their protocol by decentralizing their UI. The post outlined a new build pipeline for their UI which creates a new IPFS page for each release and updates their .com and ENS to point to it. This creates fully versioned & verifiable history of all UI releases and maintains a fallback in-case of a faulty release.

Liquity has taken the decentralization game to another level. They don’t even maintain any of the UIs that are used to interact with their protocol. Instead, within their protocol they created a way to give kickbacks to developers of UIs. This way the Liquity team has no hand in a user’s interaction with the protocol and UI devs are incentivized to maintain their interfaces, which range from standalone .com websites to ENS + IPFS hosted sites. In effect, Liquity is a multi-headed Hydra.

Sure, it’s annoying to add extra steps to you deployment process but in the long run the more our industry is decentralized the resilient it will be. But don’t take my word for it, listen to your favorite crypto lawyer & decentralize your protocols now.

https://twitter.com/jchervinsky/status/1488546382558420993

While there is no silver bullet there are a few bits of tech that will help you on your way:

1. Use IPFS to host your front end.

2. Get a protocol ENS name, even if it’s only for a backup URL

3. Look into permanent IPFS pinning w/ Arweave using Arkb

4. Steal Uniswap’s release process which creates a verifiable, versioned & IPFS hosted UI on each release.

And if you aren’t technically minded, go forth and pester your favorite protocols to make some changes to help decentralize finance.

Decentralized Finance as it stands at the moment is a bit of a misnomer.

Most of the decentralization efforts have gone towards satisfying regulatory requirements related to custody/handling of user funds. While this does mitigate the majority of counter-party risks, it’s not the panacea worthy of the DeFi moniker.

The common model in the space is a decentralized smart contract back-end with website crucial to usability hosted by the team. Now I'm no Fed, but if the key to a protocol’s continued use was a single website developed, maintained & hosted by the founding team, I might start to wonder if it was decentralized as they claimed. And before you start: No. Etherscan’s write contract page is not an alternative dApp UI.

It’s an easy oversight to make, because the website isn't technically touching the funds. The website only displays info and helps the connected wallet prepare the transactions it makes with the contracts, right? You are making the assumption that the regulator who’s out to get you will understand that distinction or care.

So where do you go from here? Let take a look at some examples of decentralized UIs.

DxDAO lives up to to the DAO part of its name. All of the DAO’s web assets are hosted by a decentralized file storage system, called IPFS but not only that, they solely utilize Ethereum Name Service (ENS) as their public URL. By combining IPFS + ENS they’ve effectively removed almost all centralized dependencies in-between their users and the protocol.

Recently Uniswap Labs released a post about further decentralizing their protocol by decentralizing their UI. The post outlined a new build pipeline for their UI which creates a new IPFS page for each release and updates their .com and ENS to point to it. This creates fully versioned & verifiable history of all UI releases and maintains a fallback in-case of a faulty release.

Liquity has taken the decentralization game to another level. They don’t even maintain any of the UIs that are used to interact with their protocol. Instead, within their protocol they created a way to give kickbacks to developers of UIs. This way the Liquity team has no hand in a user’s interaction with the protocol and UI devs are incentivized to maintain their interfaces, which range from standalone .com websites to ENS + IPFS hosted sites. In effect, Liquity is a multi-headed Hydra.

Sure, it’s annoying to add extra steps to you deployment process but in the long run the more our industry is decentralized the resilient it will be. But don’t take my word for it, listen to your favorite crypto lawyer & decentralize your protocols now.

https://twitter.com/jchervinsky/status/1488546382558420993

While there is no silver bullet there are a few bits of tech that will help you on your way:

1. Use IPFS to host your front end.

2. Get a protocol ENS name, even if it’s only for a backup URL

3. Look into permanent IPFS pinning w/ Arweave using Arkb

4. Steal Uniswap’s release process which creates a verifiable, versioned & IPFS hosted UI on each release.

And if you aren’t technically minded, go forth and pester your favorite protocols to make some changes to help decentralize finance.