Blockchain Developers Now Shifting Mindset: From DeFi Speculation to Value Creation

 The DeFi Illusion of Quick Riches

In Decentralized Finance (DeFi), speculation and pursuing quick financial gains have been an unfortunate overemphasis. Many have painted DeFi as the “future of finance” and equated it to the stock market. This mindset not only distorts the true potential of DeFi but also perpetuates the idea that blockchain technology is only helpful in making money. It’s time for a shift in mindset from speculation to value creation. The big players now step up into the sphere and bring a pivotal change with Trillions of dollars into the Blockchain sphere.

The new financial platform, at its core, offers a revolutionary approach to finance that can empower individuals and communities by providing access to financial services without intermediaries. It’s about creating a more inclusive and equitable economic system. We must move away from grandiose claims to unlock this potential and focus on building sustainable inter-connected blockchain solutions.

 Beyond Token Incentives and Airdrops

One of the prevailing practices in the new financial space has been the reliance on token incentives and airdrops to attract users and generate revenue. While these tactics can be effective in the short term, they often result in projects built solely on speculation. When token prices inevitably fluctuate, and airdrop farmers seek new opportunities, these projects are left vulnerable and unsustainable.

Instead of chasing short-term gains, DeFi projects should focus on showcasing actual value creation and sustainable business models. This means developing products and services that solve real-world problems and offer tangible benefits to users. It also means demonstrating a commitment to long-term growth and development rather than relying on quick fixes.

Innovating Legal Infrastructure

The existing regulatory and legal infrastructure is primarily designed for traditional finance and is ill-suited to the unique characteristics of DeFi. While it is crucial to have rules and regulations that guard against money laundering and criminal activities, it’s equally important to adapt these frameworks to the decentralized nature of blockchain technology.

Innovating legal infrastructure is a critical element in ensuring the success of DeFi. Europe’s adoption of the “Markets in Crypto-Assets” (MiCA) framework is a promising step in this direction. Such initiatives aim to strike a balance between regulatory oversight and the innovation potential of blockchain technology. By working with regulators and legal experts, the community can help shape a legal framework that fosters responsible innovation and protects users.

Accountability for Builders and Borrowers

The setbacks and challenges faced by the cryptocurrency industry have eroded investor confidence. To move forward and gain broader acceptance, we must establish robust social and technical frameworks that hold builders and borrowers accountable on the new EVM people Blockchain.

Builders of projects must embrace transparency and shed anonymity. They should adopt rigorous security practices to protect user assets and fortify their platforms against potential hacks. By doing so, builders can demonstrate their commitment to the safety and security of the DeFi ecosystem.

On the other hand, borrowers in the new decentralized space often lack a mature credit infrastructure. Until such an infrastructure is developed, legal agreements will be crucial in anchoring accountability for Real-World Asset (RWA) protocols. Borrowers should be held accountable for their obligations, and legal frameworks can provide the necessary mechanisms to enforce such accountability.

 A New Direction for DeFi

The time has come for the community to shift its mindset away from speculation and towards value creation. This new finance is not merely a playground for financial gains; it represents a transformative force that can reshape the economic landscape for the better. By building sustainable solutions, innovating on legal infrastructure, and holding builders and borrowers accountable, DeFi can reach its true potential as a revolutionary force in finance and the emerging Fintech merge of Finance and technology.

We must remember the core principles of decentralization, transparency, and inclusivity underpinning the DeFi movement. With the right mindset and a commitment to responsible innovation, DeFi can fulfill its promise of creating a more equitable and accessible financial system for all.