# What does Haven1 solve?

**There's currently a disconnect between the worlds of traditional and** [**decentralized finance**](/additional-resources/haven1-terminology.md)**.** In its current state, DeFi simply isn't built for mass adoption, mainly due to its vulnerability to fraud and the potential for users to lose funds. This disconnect highlights the need for stronger security measures and more robust user protection to build trust and facilitate broader acceptance of DeFi.

## Challenges facing blockchain

Haven1 aims to **propel DeFi into the mainstream** by addressing three key challenges. This will pave the way for the next generation of secure, decentralized financial products.

<figure><img src="/files/4psxqsjnsEbC4OolffCR" alt=""><figcaption></figcaption></figure>

<details>

<summary><strong>Unreasonable risk management expectations from crypto users</strong></summary>

* The DeFi space is complex and intimidating, especially for beginners.&#x20;
* Fraud is rampant in DeFi, with 2022 losses amounting to over [$3.8 billion](https://blog.chainalysis.com/reports/2022-biggest-year-ever-for-crypto-hacking/).
* As a result, retail users are losing trust in the ecosystem.
* The lack of robust risk controls is preventing the flow of institutional capital into the space.&#x20;

</details>

<details>

<summary><strong>Absence of industry standardization</strong></summary>

* Blockchain's underlying principles, mechanisms and terminology are technical and confusing.
* Lack of understanding and technical know-how are the main roadblocks for prospective users, according to [National Research Group](https://www.nrgmr.com/our-thinking/how-consumers-feel-about-web3/).
* To succeed, DeFi must provide a standardized user experience, intuitive wallets, transparent [smart contracts](/additional-resources/haven1-terminology.md), mandatory oracle integration, and user-friendly interfaces.

</details>

<details>

<summary><strong>Unknown counterparty risk</strong></summary>

* Major players are showing caution towards blockchain technology due to concerns about unknown counterparty risks and the need for more defined governance standards.&#x20;
* The threat of legal liability related to combating financial crimes and maintaining the integrity of transactions is a significant issue for institutions.&#x20;
* For decentralized finance (DeFi) to gain wider acceptance, it must align with global professional standards for governance and responsible stakeholder conduct.

</details>

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