# DeFi Problem

Significantly, there are many problems with DeFi systems. Among them, the disadvantages that can have the greatest impact on users and markets are as follows.​

​​

1. Vulnerability in Smart Contracts​

2. Uncertainty of the DeFi Market​

3. low liquidity​

4. Vulnerability in Smart Contracts​

Smart Contract is a programmable algorithm in the form of a prototype of an existing contract and is a key technology in the DeFi system. That's why a vulnerability in smart contracts can cause great disruption to the DeFi ecosystem.​

The Smart Contract controls the execution of contracts between the two parties after the condition is entered. However, errors or flaws in the code risk losing funds locked in the smart contract. This is pointed out as a major problem because it can compromise reliability and cause serious damage to users.​

2\. Uncertainty of the DeFi market​

Market uncertainty is a problem that market participants fear. Unlike other financial assets, cryptocurrency is more volatile, although it is often helped by various technical indicators because uncertainty about the future cannot be eliminated. The changing DeFi market in seconds has made users feel more anxious and burdened.​

As a result, investors will experience sharp price rises and falls, even if everything is technically normal. If the market continues to fall, it could suffer exponential losses. Due to these shortcomings, market volatility and uncertainty make it difficult for many members of the public to recognize cryptocurrency as a stable measure of value.​

3\. Low Liquidity​

There are additional difficulties in cashing in DeFi systems. Due to the limited quantity pool, it may be difficult to exchange cryptocurrency. In other words, you may not receive money on time, which is a big problem in the decentralized financial system. People claim that cryptocurrency is a highly liquid asset, but this applies to only a few digital assets.​
