Decentralized Finance (DeFi) has grown rapidly, but still faces challenges that limit its mainstream adoption. Key gaps include poor user experience, security risks, limited real-world asset integration, and interoperability issues between blockchain networks. Addressing these could unlock DeFi's potential to serve the unbanked, create new financial tools, and compete with traditional finance.

A Systematic Approach to DeFi Innovation

Rather than focusing on a single product, one could take a comprehensive approach to identifying and solving multiple DeFi challenges. This might involve research and development across areas like:

• Identity systems for undercollateralized loans
• Cross-chain compatibility solutions
• User-friendly interfaces for non-technical users
• Compliant fiat currency gateways

The process could combine market research with practical testing of promising solutions through prototypes.

Potential Benefits and Stakeholder Alignment

Various groups stand to benefit from improved DeFi infrastructure:

• Regular users seeking better financial control
• Developers needing better building blocks
• Traditional institutions exploring blockchain

While incentives generally align around creating more accessible finance, careful design would be needed to balance decentralization with regulatory requirements.

Implementation Strategy

A phased approach might work well:

1. Research current limitations through user interviews and technical analysis
2. Build minimal prototypes for top opportunities
3. Develop full solutions for the most promising concepts

As a starting point, creating an open database mapping DeFi gaps by importance could help focus efforts where they're most needed.

This systematic method differs from existing single-protocol solutions by addressing interconnected challenges across the DeFi ecosystem, potentially creating more comprehensive improvements.