Make DeFi Great Again.
Contents
I. Introduction | II. Make DeFi Great Again | III. Conclusion
I. Introduction
The blockchain revolution began with a simple yet powerful vision: creating financial systems that operate without trusted intermediaries, giving individuals true ownership of their assets and data. Bitcoin emerged as the first embodiment of this vision, followed by Ethereum’s programmable smart contracts that birthed an entirely new financial ecosystem. What started as an idealistic movement to democratize finance has since exploded into the complex, multi-layered landscape we now call DeFi — Decentralized Finance.
Yet amid the frenzy of innovation, yield-chasing, and technical sophistication, something fundamental has been lost. As TVL (Total Value Locked) figures climbed into the billions and protocols ballooned with features, the core principles that made DeFi revolutionary in the first place have become obscured. This blog post examines how simplicity, focus, and first principles thinking can revitalize the DeFi ecosystem and deliver on the original promise of financial sovereignty for all.
The cryptocurrency space has evolved dramatically since the early days of Bitcoin and Ethereum. What began as a revolutionary concept for permissionless, trustless financial systems has morphed into an increasingly complex ecosystem of protocols, governance mechanisms, and interconnected products. In this race toward complexity, many DeFi projects have lost sight of what made the space revolutionary in the first place.
II. Make DeFi Great Again
Today, we need to rediscover those foundational principles. The most successful and resilient DeFi products have always been those that solve real problems with minimal complexity. Uniswap’s automated market maker model, for instance, revolutionized token swapping with an elegantly simple design that users could intuitively understand.
The 80/20 Rule: Making the Right Trade-offs
The Pareto principle suggests that roughly 80% of effects come from 20% of causes. In DeFi, this translates to focusing development efforts on the core features that deliver the most value. Too many projects are burdened with feature bloat, adding complexity that serves only a tiny fraction of users while increasing risk for everyone.
Smart trade-offs are essential. Rather than trying to be everything to everyone, successful DeFi protocols identify their core value proposition and execute it flawlessly. This might mean: Focusing on one primary use case instead of ten tangential ones Prioritizing security and reliability over flashy new features Building for actual user needs rather than theoretical edge cases
When MakerDAO launched, it didn’t try to create a comprehensive financial ecosystem overnight. It focused on one thing — a decentralized stablecoin backed by crypto collateral — and did it well enough to become a cornerstone of the entire Ethereum DeFi space.
Minimalist, Elemental Governance
Governance has become one of the most overcomplicated aspects of DeFi. What started as a means to ensure protocol upgradability and community ownership has evolved into byzantine systems that few understand and even fewer participate in.
The best governance is often minimal governance. Projects should ask: “What’s the least amount of governance needed for this protocol to function properly?” This might mean: Limiting governance scope to critical parameters and emergency functions Creating clear, simple voting mechanisms with understandable outcomes Avoiding governance for features that don’t genuinely require it.
Compound’s governance model succeeded because it focused on the essential: managing risk parameters and protocol improvements. It didn’t try to create an elaborate DAO ecosystem with multiple sub-committees and complex delegation schemes.
Interoperability as an Add-on, Not a Foundation
Composability — the ability for DeFi protocols to integrate with one another — has been both a blessing and a curse. While it’s enabled powerful new financial primitives, it’s also introduced systemic risks and unnecessary dependencies.
Interoperability should be an add-on feature, not the foundation of a protocol’s design. Projects should be able to function independently, with integration points as optional enhancements rather than critical dependencies. This approach: Reduces cascading failures across the ecosystem Allows protocols to be audited and understood in isolation Ensures projects can survive even if their integration partners fail. The most resilient DeFi protocols maintain clear boundaries and interfaces, focusing first on their core functionality before worrying about how they fit into the broader ecosystem.
Keep It Simple, For the Love of God
Perhaps the most important principle: simplicity is a feature, not a limitation. Complex systems are fragile systems. They’re harder to secure, harder to govern, harder to use, and harder to fix when they break.
Simplicity in DeFi means: Clean, auditable code with minimal dependencies User interfaces that don’t require a PhD to navigate Documentation that explains the protocol in terms anyone can understand Transparent risks that users can evaluate without specialized knowledge. The protocols that have stood the test of time from Bitcoin to Curve Finance, all share a common trait: they do one thing exceptionally well, with minimal complexity. They resist the temptation to add features simply because they can.
III. Conclusion
As the Cardano ecosystem continues to mature, we must not lose sight of our bearings and try to blindly follow in the footsteps of other ecosystems, thinking success is a given if we simply replicate their approaches. We must pave our pathway forward through the noise and temptations of the shiny new thing and build on the solid foundation of robustness, simplicity, and practicality. It’s often a case where we look to the other side and think their grass is greener, when in actuality, the grass is green where you water it.
Cardano’s unique strengths already position us to excel at delivering on DeFi’s original promise. Our deterministic transaction processing eliminates unpredictable fees and front-running problems that plague other ecosystems. The eUTXO model provides inherent security advantages and transaction parallelism, enabling greater scalability. Liquid staking solutions allow users to participate in consensus while still utilizing their assets in DeFi protocols. Our rigorous, peer-reviewed, formal methods approach to development ensures that security isn’t sacrificed for speed, while our commitment to backward compatibility provides stability for builders. The native multi-asset standard eliminates the need for complex smart contracts just to create tokens, and Plutus’s functional programming foundation makes formal verification more tractable.
For developers in our ecosystem, this means cultivating these advantages — resisting the urge to chase every new trend or feature request that worked elsewhere. For investors and users, it means recognizing the long-term value of a foundation built on mathematical certainty through demanding transparency and understanding before committing capital. And for the Cardano ecosystem as a whole, it requires consistent attention to projects that leverage our technical strengths while prioritizing resilience over unnecessary complexity.
The blockchain revolution promised financial freedom through simplicity and transparency. By returning to these core values and focusing on what makes Cardano unique, we can create a DeFi landscape that isn’t just profitable for insiders or accessible only to technical experts, but truly valuable and usable for everyone. In doing so, we won’t just make DeFi great again — we’ll finally deliver on its original, world-changing promise within an ecosystem built for long-term sustainability.
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