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DeFi

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Opinion by: Brian Huang, co-founder of GliderCrypto markets run 24/7. Today’s wallets leave users exposed to constant risk, highlighting the urgent need for automated protections that operate around the clock. While the US stock market closes every weekday at 4:00 p.m. ET, cryptocurrency markets never sleep.&nbsp;As more assets, including stocks, move onchain over the next few years, it won’t be long before most assets will trade 24/7. While permissionless access to assets around the world is great, no consumer tool today, whether TradFi or DeFi, is built to protect users around the clock.&nbsp;We’re quickly moving into a new era of constant market exposure. As a result, DeFi has given rise to a culture of sleepless nights under the guise of self-sovereignty, forcing people to monitor markets, manage risk and execute transactions at all hours of the day. Constant exposure inevitably breeds burnout.&nbsp;The irony is that we’ve finally built truly programmable finance onchain, so why aren’t we taking advantage of it? Instead, DeFi today means shuffling between apps, manually operating funds and being at the mercy of middle-of-the-night margin calls and liquidations.&nbsp;While outsiders believe market volatility is what prevents everyday investors from participating in DeFi, the real barrier is the lack of robust systems designed to protect users. Crypto’s next evolution must prioritize embedded automations: something that will ultimately make wallets intelligent, proactive and safe by default.<h2 id="today-s-crypto-wallets-operate-like-passive-vaults">Today’s crypto wallets operate like passive vaults</h2>Crypto wallets operate like passive vaults. That means that, unlike smart devices that anticipate and adapt to a user’s needs, the wallets that permeate crypto operate on a standard of clicking through never-ending manual approvals. This reliance on constant user input is incompatible with the reality of 24/7 market exposure.This problem can be more easily understood by looking at Terra’s UST <a href="https://cointelegraph.com/news/why-did-terra-luna-and-ust-crash-find-out-on-the-market-report" rel="noopener noreferrer nofollow">collapse</a> in 2022. The stablecoin depegged ~5% in four hours before plunging to virtually zero in just three days. If you were in Asia and held UST in self-custodial wallets, your stablecoins were down 30% overnight.&nbsp;Manual approvals meant you had no automatic protections or ability to auto-sell. Countless crypto users lost their life savings in the collapse. That could have been prevented via smarter wallets.&nbsp;&nbsp;While markets have continued to be volatile, DeFi tools remain largely reactive rather than protective. There are still no built-in safety buffers or automation in place to prevent losses when users are offline or asleep, forcing investors into a state of constant vigilance.It may be easy to blame this on bad UX, but the truth is that it’s actually a foundational flaw inherent to wallets today. Until wallets can execute preset strategies and manage even the simplest risks, they’ll remain a tool for power users — not everyday investors.&nbsp;<h2 id="tradfi-s-advantage-is-automation-that-protects-you">TradFi’s advantage is automation that protects you</h2>On the other hand, TradFi systems have built-in protection. From <a href="https://cointelegraph.com/learn/articles/when-to-sell-crypto?utm_source=chatgpt.com" rel="noopener noreferrer nofollow">stop-loss</a> orders to scheduled portfolio rebalancing, traditional tools automatically adjust portfolios and maintain risk levels when markets fluctuate, eliminating the need for human intervention.Related: <a href="https://cointelegraph.com/news/crypto-wallets-becoming-control-centers-digital-lives-podcast" rel="noopener noreferrer nofollow">Are&nbsp;crypto wallets becoming the control centers of our digital lives?</a> These protections are woven into its infrastructure, giving investors the freedom to disengage. While DeFi purists may argue that user control must be prioritized, it’s critical to note that without automation, control becomes a burden.&nbsp;Retail investors can also reap the benefits without needing to understand every mechanism in painstaking detail. Whether that’s through robo-advisors or passive index strategies, people trust that their money is working for them.<h2 id="defi-needs-to-be-smarter">DeFi needs to be smarter</h2>If DeFi is set to evolve into a fundamental component of our financial system, then wallets need to become true partners: automatically protecting positions, discovering rebalancing opportunities and reallocating to new yield sources while you sleep. Mechanisms that prevent liquidation and react when markets turn need to be built into investments to invest with certainty.&nbsp;Ultimately, users want peace of mind that their investment goals will be executed intelligently and effectively.Just like you can “set and forget” your thermostat and autopay bills, smart DeFi reassures you that your wallet is always working for you. The ability to walk away from your screen and trust the system is key to scaling DeFi beyond its current niche.While critics worry that adding automation layers — especially smart agents or rule-based execution — could reintroduce centralized risk or add opaque abstraction layers, it’s essential to understand that automation isn’t about relinquishing control. Instead, it’s about codifying it. Just as with setting up investment goals and risk levels on traditional trading platforms, individuals can define the rules, adjust them at any time and maintain complete transparency throughout the process.Smart automation reinforces sovereignty because a wallet that can protect you 24/7 is no less decentralized; it’s just more user-friendly.<h2 id="let-your-wallet-work-while-you-sleep">Let your wallet work while you sleep</h2>The bottom line? If autopilot can safely steer your car without your input, then your wallet should be able to steer your portfolio without demanding your constant attention.Every other area of technology has embraced intelligent automation.&nbsp;It’s time for crypto to catch up and deliver what users actually need to thrive. Sleepless traders won’t lead the next wave of crypto adoption. It’ll be led by systems that empower you to invest with confidence. Opinion by: Brian Huang, co-founder of Glider.This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

DeFi needs smarter wallets to prevent overnight losses

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