Wintermute CEO: "DeFi innovation is all show and no substance"...Degenerates into a replica of traditional finance

▲ DeFi

Criticism is emerging that the DeFi (Decentralized Finance) market has stopped innovating and has degenerated into a replica of the existing financial system, spreading skepticism about the ecosystem's survival.

According to U.Today, a cryptocurrency specialized media outlet, on April 21 (local time), Evgeny Gaevoy, CEO of global algorithmic trading firm Wintermute, assessed that it is difficult to find innovative prospects in the current DeFi industry. Gaevoy recently pointed out on social media that DeFi is gradually moving away from its initial goals of financial democratization and technological advancement.

Gaevoy criticized the current DeFi ecosystem as merely an unnecessary addition of steps to the existing financial system. New protocols are focusing solely on creating complex structures rather than solving practical problems. As DeFi loses its technological edge, individual investors' interest has significantly decreased compared to the past.

The head of Wintermute analyzed that DeFi's chronic security issues and opaque governance structure are hindering the ecosystem's growth. Gaevoy criticized many projects for relying solely on token incentives without establishing sustainable business models. Such a structure carries a high risk of causing cascading asset collapses when market volatility increases.

Voices within the virtual asset industry also echo Gaevoy's remarks. It is argued that for DeFi to achieve true innovation, it must demonstrate practical utility along with regulatory compliance. Wintermute plans to apply strict standards to future DeFi projects. The market is watching to see if the DeFi ecosystem will lay the groundwork for a resurgence through self-correction.

DeFi faces the challenge of demonstrating the point at which technological research achievements transition into mainstream services. The current stagnation is interpreted as a crisis of trust beyond simple price adjustments. Gaevoy's criticism serves as a painful moment for reflection for developers concerned about ecosystem scalability. The resolution of future security incidents and the actual influx of users are expected to determine the future survival of DeFi.

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