DeFi positions after a death

DeFi positions are the hardest category to inventory in an estate because they are not “a balance”, they are active relationships with protocols. Some continue, some accumulate, some can be liquidated. The executor’s job is to understand what exists before deciding anything. The rules are in smart contracts, which means they are executed without a help desk being able to intervene.

Position types and what they mean

• Lending. Deposits in lending protocols: the estate owns a claim that can often be withdrawn normally by the account owner. But a lent or collateralised position can deteriorate with market moves, and automated liquidation can sell the collateral if nobody acts.
• Staking. Tokens locked for rewards: time-locks and unbonding periods apply; the position may be illiquid for months, and the unbonding wait cannot be skipped.
• Liquidity provision. Pool positions (LP tokens): value fluctuates with the pool; withdrawing may be complex and usually requires a connection to the wallet that manages the position.
• Yield/farming. Positions earning rewards: compounding may continue after death, which is good or bad depending on the position. Some rewards and airdrops are only claimable within a window.
• Governance. Voting power that becomes idle; usually irrelevant to value but worth noting.

What can happen after a death

• Lending positions keep running: collateral can be liquidated automatically while the estate is still determining authority.
• Staking and lock-ups stay locked: an executor cannot skip the protocol’s withdrawal procedure.
• Liquidity pools continue to accrue or fluctuate; withdrawing follows the protocol’s rules.
• Rewards and airdrops may accumulate, or expire if not claimed in time.

The estate problems DeFi creates

• Documentation is thin. Families rarely know these positions exist; the wallet may be the only trace.
• Liquidation risk. Some positions can be liquidated if health factors drop. Once authority is established, this may need attention, never before it.
• Jargon hides value. Without protocol knowledge, a position can look worthless or priceless and be neither.
• No customer service. There is no support line; the protocol’s interface and docs are the only source.

How to inventory safely

1. Identify the wallet(s) through the normal search (find crypto).
2. Read the chain, not the app. Balances and positions on public explorers are indications, record them, do not act on them.
3. Note every protocol and chain. DeFi spans chains; the inventory must say where each position lives.
4. Get qualified technical help for the inventory itself if needed, reading protocol state is a technical task, not a decision to hand over keys.

What not to try yourself

• Do not close or move positions before the authority situation is assessed.
• Do not endlessly log in or try passwords on protocols.
• Do not enter seed phrases on arbitrary websites.
• Do not pay anyone who claims they can “release” a position. The rules of a smart contract cannot be bypassed; anyone who claims otherwise for an upfront payment is a warning sign.

When technical assessment is useful

When it is clear which positions are open but access is missing (or when it is unclear whether DeFi positions exist at all) a technical assessment can help. That is inventory and restoration work within a reviewed lawful framework; feasibility is determined per case.

DeFi does not change the golden rule: preserve, identify, establish authority, then act. It simply makes step two genuinely difficult; that is what this page addresses.