Here are some big-picture UX issues. Much bigger than simple UI problems, but it’s good to take a step back and keep these in mind.
- High Transaction Fees: The high transaction fees on some blockchains can significantly impact DeFi users, making small transactions or frequent interactions costly. This is the main reason why L2s and alternative L1s took off.
- Interoperability and Standardization: Lack of interoperability between different blockchains and Web3 protocols limits the seamless exchange of assets and data across platforms. The standardization of protocols and data formats is still a work in progress.
- Smart Contract Vulnerabilities: Hacks, bugs, or exploits in smart contracts can lead to financial losses and undermine user trust.
- Impermanent Loss in Liquidity Provision: Users participating in liquidity provision on decentralized exchanges may face the risk of impermanent loss, a situation where the value of your assets can drop while holding them in the pool.
- Slippage and Front-Running: In decentralized exchanges, users may experience slippage and front-running issues, especially during periods of high volatility, leading to less favorable prices and potentially higher trading costs.
- Wallets doing something weird: Sometimes Metamask is just a pain to use and will throw up weird errors.
- Rug Pulls and Scams: The DeFi space has seen instances of rug pulls and scams, where malicious actors create fraudulent projects to deceive users and steal their funds.
- Complexity of DeFi Strategies: More sophisticated DeFi strategies, such as options or chaining together several borrow/lend actions, may be challenging for users to understand fully.
- Regulatory Uncertainty: The evolving regulatory landscape around DeFi can be a source of frustration, as it may lead to uncertainty about compliance requirements and the potential impact on their activities.
- Limited Customer Support: Most DeFi projects and platforms lack adequate customer support channels, leaving users with few options for resolving issues or seeking assistance.