As a CeDeFi platform, Moonfarm is able to improve on many of the disadvantages of DeFi. We have summarised a few such disadvantages here.
I. DeFi’s Disadvantages
➔ Knowledge Barrier. The DeFi process can be difficult to understand from a user perspective. This is commonly the case for newcomers to cryptocurrency / DeFI, but even those who are experienced DeFi users can find there is a learning curve with different protocols or platforms. This represents a critical challenge in its path to mass adoption.
➔ Wallet Ownership. Users need to own a wallet(s). This requires them to understand how on-chain transactions work (at a minimum, how to send and receive) and how to store their own private keys securely. This may seem simple for most people reading, however, it is known that poorly secured wallets and private keys are one of the leading causes of loss of investor funds (along with direct contract exploits).
➔ Single-chain. Most DeFi projects are confined to a single blockchain. However, the best farming pools (typically those that provide the highest APY with the lowest risk), are usually found across a number of blockchains. Of course, the user can interact with multiple different platforms on different chains, but actively engaging and monitoring all of these can become very complicated and time-consuming.
➔ Platform Selection. Choosing a credible and secure platform requires a deeper understanding of cryptocurrency investment including how to vet a project and its team, assess for elements of security (eg. audits, doxxed team), community culture, as well as which platforms will provide the greatest return on investment with the lowest level of risk or fees.
➔ Liquidity Downsides. DeFi farming platforms typically require the user to add exchange liquidity in order to receive liquidity provider tokens (known as “LP tokens”). This means double token assets are required with high gas fees and placing the user at risk of impermanent loss.
➔ High Gas Fees. To actually get your assets allocated to a DeFi farming pool there are often many transactions involved: purchasing the double token assets; providing liquidity on the exchange to receive LP tokens; depositing LP tokens in the farming pool; as well as all the transaction approvals, and ultimately all of the reward withdrawal transactions too. Each of these steps entails another network gas fee, which, depending on the blockchain, can result in a significant cost that may greatly impact a users’ final return on investment - including turning it into a loss.
➔ Niche market. DeFi’s ability to grow to become a mainstream investment product will likely be limited by its level of complexity.
Therefore, CeDeFi, and Moonfarm were created to address the aforementioned problems and provide customers with an effortless cryptocurrency experience.
II. Moonfarm’s Advantages
Moonfarm is a farming system that combines DeFi’s high-yield APR with CeFi’s ease of use.
➔ User Friendly. Moonfarm’s platform has been designed to be so straightforward that anyone who is new to DeFi can participate, without the need for an in-depth understanding. Point-and-click processes allow users to begin farming and make adjustments to their pool allocations quickly and easily.
➔ CeFi-Style Wallet. The need to download additional third-party wallet apps is gone with Moonfarm. We have taken the same approach to CeFi platforms like Binance and Coinbase, allowing a simple yet highly secure web-based wallet without the need to remember or store private keys or seed phrases.
➔ Multi-chain. Moonfarm provides access to the best farming pools across multiple blockchains. We interact with all of the major blockchains and are regularly adding more to our service.
➔ Single-sided staking. Moonfarm users have the option of staking both LP tokens or single tokens. This enables users to earn passive income without the need to provide liquidity to a project, thereby avoiding the complexity of liquidity provision as well as the potential risk of impermanent loss.
Moonfarm has been successfully audited by independent auditing company Arcadia. The system consists of multiple layers of protection designed by IT security experts. This includes auto-detect vulnerability processes and auto-stop on all transactions if any suspicious signals appear. We have a multi-approval system for internal transferring and asset management, to prevent internal hacking. Moonfarm has operated daily since inception without a history of exploitation.
➔ Very low fees. Profit potential is increased for Moonfarm users due to low gas fees on our platform, along with the removal of many of the transactions required to deposit and withdraw assets from a typical DeFi protocol.
➔ Potential for mass adoption. By removing the complexity layer associated with DeFi, making yield farming as easy as buying stocks, whilst offering higher returns than traditional finance, Moonfarm has the potential for mass adoption.