On DeFi Frontends

Merging the Future of Finance with the DWeb

The decentralized finance (DeFi) movement contends to offer open and permissionless markets. But DeFi does not operate in a vacuum. In practice, frontend websites and applications remain centralized choke points to backend protocols. Decentralized finance is not truly decentralized until the whole stack is.

Censorship poses a real threat to DeFi frontends, especially as markets amass more funds and attention. Open financial tools impede on existing power structures and while protocols can be elusive targets, websites and applications can be more easily shut down. A different, but related threat is the lack of integrity assurances in our access points to these markets. DeFi frontends are the arbiters of how we view and interact with the underlying protocols. Consider that the Balancer team recently hid a liquidity pool from their site without consent from the community. Whether or not the developer team used their best discretion in blacklisting the pool, that they are able to do so became abundantly clear.

You may say that decentralization at the smart contract layer is sufficient as it lets anyone build a frontend website to access DeFi markets. Albeit a wider set of gatekeepers, those that maintain the inroads to DeFi protocols are gatekeepers nonetheless. We should aspire to frontend interfaces as secure, verifiable, and autonomous as the backend protocols they provide access to.

Complementary Revolutions

The decentralized web (DWeb) movement widens the scope of decentralization, filling in the gaps where Ethereum leaves off. A slew of file and data storage projects offer decentralized hosting solutions while Handshake domains represent the last mile of our DWeb stack.

Handshake is a decentralized naming protocol. By replacing the current Certificate Authorities system with a distributed root zone, internet users become the owners of the domain name system and websites become more resilient to censorship. Decentralization also provides integrity assurances in the endpoints we interact with. A Handshake domain can point to a neutral and open source DeFi frontend and do so in a cryptographically verifiable way.

Uniswap is the largest decentralized exchange on Ethereum with 200M+ in daily volume. The exchange is now redundantly hosted on Sia’s Skynet, a decentralized file storage network, making a critical DeFi protocol’s frontend immutable. Skynet uses Handshake domains to easily resolve this Uniswap frontend. It’s now possible to resolve decentralized domains that host decentralized frontends to access decentralized financial markets.

Fig. 1 Decentralized frontend and backend infrastructure

Audius is a music streaming platform on Ethereum and another prime example of the complementary DeFi and DWeb revolutions. Their music library is hosted on IPFS so these artists can never be de-platformed again, as many have been previously. Audius owns the ‘audius/’ top-level domain on Handshake and provides subdomains for every user on the network. This means each artist now has a corner of the Internet where their music can be permanently and permissionlessly accessed. If App Stores or labels don’t like the services or potential financial tools layered on top of the streaming platform, Audius now has redundancies in place to secure against this. These are just redundancies today, you can still access Audius through your regular browser. But the redundancies of today become the standards of tomorrow.

Fig 2. Audius user page resolving via Handshake’s HandyBrowser

Social Technologies

There are currently two types of DeFi frontends, sites maintained by the core protocol development teams and sites maintained by third party curation services. A third category of sites is now possible — those maintained autonomously. While we now have the technology to do so, we also need the collective desire to get there.

If you’re reading this, the DWeb meme is still early. Take Anthony Sassano’s comments rationalizing the Balancer frontend incident that “just because a protocol is decentralized, doesn't mean the front-end has to be.” Users recognize the fragility of our access points to DeFi markets, they simply do not yet demand of frontends what we have come to expect of backends. That these seem like untenable expectations, that settling for centralized frontends seems acceptable, shows the work ahead to onboard the community. These are social technologies after all.