Vitalik Buterin is right: DeFi today is a circular speculative economy. The bigger opportunity lies in bringing traditional capital markets on-chain, so that crypto reaches the mainstream, says Zach Rynes (aka ChainLinkGod), who serves as a Chainlink Community Liaison. The ethos of decentralized finance (DeFi) is the belief that a blockchain-based financial system will free society from rent-seeking intermediaries and make financial services accessible to the globally unbanked. And yet, it's not hard to miss that much of what is considered "DeFi" today really just feels like a circular casino that facilitates speculation on tokens whose value is primarily derived from monetizing token speculation.

Ethereum Co-Founder Vitalik Buterin recently created a ripple on crypto twitter writing that DeFi "feels like an ouroboros [a snake eating its own tail]: the value of crypto tokens is that you can use them to earn yield which is paid for by... people trading crypto tokens." He went on to note that "while defi may be great it's fundamentally capped and can't be _the_ thing that brings crypto to another 10-100x adoption burst."

DeFi in its current state is not the catalyst that will scale crypto adoption beyond current levels, but that doesn't mean the creation of an on-chain token casino was all for nothing. There is only so much demand for circular token speculation and there isn't an infinite amount of retail capital to burn. The bigger opportunity lies in bringing traditional capital markets on-chain, so that crypto reaches the mainstream.

Source: https://www.coindesk.com/opinion/2024/09/06/escaping-the-casino-how-tokenized-assets-will-save-defi-from-itself/

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