Rebuilding Trust in Web3 Lending: How Community Rewards Drive Success

The trust issue lies at the heart of decentralized finance (DeFi). While smart contracts automate transactions, they can’t replace human judgment – a fundamental concern for lending. While blockchain technologies offer transparency, they don’t guarantee accountability. Borrowing still poses risks: borrowers could default, projects may disappear, or communities could disintegrate when rewards dry up. A recent report confirms this: investors remain most concerned about borrower defaults as the biggest threat in the DeFi ecosystem. Essentially, technology solves for transparency but not for responsibility.