Trusted intermediaries have dominated economic interactions for centuries. With the advent of decentralized ledgers, such as Bitcoin and Ethereum, people can now trade and interact without trusting a centralized custodian. In 2020 alone, decentralized finance (DeFi) grew to a 13+ Billion USD economy covering exchanges, borrowing/lending, margin trading, derivatives and more.

The non-custodial property of ledgers empowers individuals; however, it also demands greater responsibility in managing assets and private keys. Cryptographers simply assume DeFi users will understand protocols' security properties and guarantees, but in the real world it is a significant challenge to keep users informed. More research is therefore crucial to clarify user comprehension of DeFi properties. Besides usability challenges, decentralized ledgers still suffer from many technical limitations, e.g., they do not scale to throughput levels offered by state-of-the-art custodial payment networks, and more importantly, their security might be vulnerable to pseudonymous malicious actors.

The purpose of this Dagstuhl Seminar is to unite researchers with deep knowledge in the many subfields of DeFi, to jointly revisit their security, privacy and financial properties. The primary aim of the seminar is to elaborate on how we can protect DeFi users. The seminar, therefore, aims to refine the fundamental tensions between security, usability, and performance of DeFi. Second, given those insights, the seminar will aim to outline best practices for users to remain safe when engaging in DeFi. Third, we plan to apply our recommendations to the thriving DeFi ecosystem. Example topics we will study are:

• Secure decentralized exchanges
• Secure DeFi privacy and scaling ideas
• Countering market manipulations
• Quantification of decentralization

The objectives of the seminar are to:

1. Elaborate on how we can protect users of decentralized financial technologies. The seminar, therefore, aims to refine the fundamental tensions between security, usability, performance and finance of decentralized networks.
2. Given those insights, the seminar aims to outline best practices for users to remain safe when utilizing decentralized ledgers.
3. We plan to apply our recommendations specifically to smart-contract and DeFi friendly blockchains.

Creative Commons BY 4.0

Joseph Bonneau, Arthur Gervais, and Marie Vasek