DeFi’s fairness questioned and “super users” dominate

The massive growth in decentralized funding over the past three months has been accompanied by a sharp increase in the number of “super users” who dominate the sector.

Along with the proliferation of commercial bots, it has raised questions about the fairness and openness of the DeFi ecosystem. Mason Nystrom, researcher from Messari, tweeted This morning about the big leap in super users:

DeFi super users (users with more than 100 transactions) grew by almost 20% in just three months. Uniswap alone grew 50% in the second quarter and has 1,625 super users. “

Referring to ConsenSys’s recently released DeFi quarterly report, the researcher found that After Uniswap, Kyber had the next largest user base with 916 and Compound with third place with 367 super users. Maker, Augur and Bancor were among the less than 300 super users. In total, there were 1,884 super users in the second quarter, 18.8% more than in the first quarter.

DeFi’s fairness questioned and “super users” dominate
DeFi’s fairness questioned and “super users” dominate

The report defines super users as people who use DeFi platforms “more consistently and robustly”. You can use advanced commercial software like bots to get faster and more consistent benefits (although this was not directly stated). Super users are probably the ones who invest the most money and are looking for quick profits in arbitrage opportunities or quick loans.

Normal “joes” remain marginalized

Instead, Ordinary users do few transactions and typically leave their cryptocurrencies locked as collateral to take advantage of interest and token distribution incentives. The recent surge in fees on the Ethereum network can also result in regular users being out of transactions as the fees are reduced by a larger proportion of their profits.

The results suggest that Super users use platforms such as Uniswap to conduct multiple transactions for arbitration purposes. The largest overlap of shared users is between Uniswap and Kyber. 15,099 users overlap, an increase of 37% in the first quarter. Compound and Uniswap had 4,678 users overlapping in the reporting period.

Is DeFi really fair and open?

DeFi’s super-user dominance raises questions of justice. Synthetix founder Kain Warwick has this topic in one Series of tweets yesterday, suggesting A fair and efficient market could lead to unfair results‘.

“Something that occurs quite regularly in Synthetix ‘disagreements is the concept of efficiency + openness vs. Impartiality. If a system is designed to be completely open, players (e.g. settlement bots) dominate with an existing advantage. Is it fair? “

Warwick finally decided In fair and efficient markets, the big ones inevitably piled their heads. “Many people combine justice with the same results, but efficient systems actually tend to increase inequality.”, he showed. “They prefer the dominant actors.”

Use the system

In the latest edition of Defiant, Camila Russo noted that the BZRX list in Uniswap also appeared to be manipulated by bots.

“Less than 60 seconds after Uniswap’s liquidity fund was established, the BZRX price increased twelve-fold. The main winners were those who ran scripts to buy BZRX in the same block where it was available.”

Also It has been recommended that the Ethereum network may have been “spam” to prevent others from doing their transactions. DeFi is still in its infancy, but since these trends are already emerging, it may not be the utopia of financial freedom that some expect.

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