Author: Brian Huang, Co-founder of Glider
The crypto market operates around the clock. Today's wallets expose users to ongoing risks, highlighting the urgent need for all-day automated protection. While the U.S. stock market closes at 4 PM (Eastern Time) every weekday, the cryptocurrency market never sleeps.
As more assets (including stocks) move on-chain in the coming years, the era of trading most assets around the clock is not far off. While permissionless access to global assets is fantastic, there are currently no consumer tools, whether in traditional finance or DeFi, built to protect users around the clock.
We are rapidly entering a new era of continuous market risk exposure. Thus, DeFi, under the guise of autonomy, has spawned a culture of sleepless nights, forcing people to monitor the market, manage risks, and execute trades at any time of the day. Continuous risk exposure inevitably breeds burnout.
Ironically, we have finally built truly programmable finance on-chain, so why aren’t we leveraging it? Instead, today’s DeFi means hopping between applications, manually moving funds, and being at the mercy of midnight margin calls and liquidations.
While outsiders believe market volatility is the reason preventing everyday investors from participating in DeFi, the real barrier is the lack of robust systems designed to protect users. The next evolution of cryptocurrency must prioritize embedded automation: this will ultimately make wallets smart, proactive, and secure by default.
Crypto wallets operate like passive vaults. This means that, unlike smart devices that predict and adapt to user needs, wallets scattered throughout the crypto space operate on endless manual approvals as the standard. This reliance on continuous user input is incompatible with the reality of around-the-clock market risk exposure.
Observing the collapse of Terra's UST in 2022 makes this issue easier to understand. The stablecoin depegged by about 5% within 4 hours and then plummeted to nearly zero in just 3 days. If you were in Asia and held UST in a self-custody wallet, your stablecoin dropped by 30% overnight.
Manual approvals mean you lack automatic protection or the ability to sell automatically. Countless crypto users lost their life savings in the crash. This could have been prevented with smarter wallets.
While the market continues to fluctuate, DeFi tools largely remain passive rather than protective. There is still no built-in safety buffer or automation to prevent losses when users are offline or asleep, forcing investors to remain in a state of constant vigilance.
It may be easy to blame this on poor user experience, but the reality is that this is an inherent fundamental flaw in today’s wallets. Until wallets can execute preset strategies and manage the simplest risks, they will remain tools for advanced users—not everyday investors.
On the other hand, traditional financial systems have built-in protections. From stop-loss orders to regular portfolio rebalancing, traditional tools automatically adjust portfolios and maintain risk levels during market volatility without manual intervention.
These protections are woven into their infrastructure, giving investors the freedom to disengage. While DeFi purists may argue that user control must take precedence, it is crucial to note that without automation, control becomes a burden.
Retail investors can also benefit without needing to understand every mechanism in detail. Whether through robo-advisors or passive index strategies, people trust that their money is working for them.
If DeFi is to evolve into a fundamental component of our financial system, wallets need to become true partners: automatically protecting positions while you sleep, discovering rebalancing opportunities, and reallocating to new sources of yield. Mechanisms to prevent liquidations and respond when the market turns need to be built into investments to enable certainty in investing.
Ultimately, users want peace of mind knowing their investment goals will be executed intelligently and effectively.
Just as you can "set and forget" your thermostat and automatic bill payments, smart DeFi allows you to rest assured that your wallet is always working for you. The ability to step away from the screen and trust the system is key to expanding DeFi beyond its current niche market.
While critics worry that adding a layer of automation—especially smart agents or rule-based execution—might reintroduce centralized risks or add opaque layers of abstraction, it must be understood that automation does not mean relinquishing control. Instead, it is about encoding it. Just like setting investment goals and risk levels on traditional trading platforms, individuals can define rules, adjust them at any time, and maintain complete transparency throughout the process.
Smart automation enhances sovereignty, as being able to protect your wallet around the clock is not less decentralized; it is simply more user-friendly.
The bottom line? If autopilot can safely drive your car without your input, then your wallet should be able to manage your portfolio without requiring your constant attention.
Every other field of technology has already embraced smart automation.
It is time for cryptocurrency to catch up and provide users with what they truly need to thrive. Sleepless traders will not lead the next wave of crypto adoption. It will be systems that empower you to invest with confidence that will lead the way.
Author: Brian Huang, Co-founder of Glider.
Related: Can ChatGPT really predict the next crypto market crash?
This article is for general informational purposes only and is not intended to be, nor should it be construed as, legal or investment advice. The views, thoughts, and opinions expressed here are solely those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Original article: Opinion: DeFi Needs Smarter Wallets to Prevent Overnight Losses
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