[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"article-defi-runs-finance-on-public-blockchains-en":3,"article-related-defi-runs-finance-on-public-blockchains-en":31,"series-blockchain-f197ca1d-868b-47fd-b312-c100bea4c367":84},{"id":4,"slug":5,"title":6,"content":7,"summary":8,"source":9,"source_url":10,"author":11,"image_url":12,"cover_image":12,"category":13,"language":14,"translated_content":11,"related_article_id":15,"keywords":16,"key_takeaways":22,"views":27,"created_at":28,"published_at":29,"topic_cluster_id":30},"f197ca1d-868b-47fd-b312-c100bea4c367","defi-runs-finance-on-public-blockchains-en","DeFi runs finance on public blockchains","\u003Cp data-speakable=\"summary\">\u003Ca href=\"\u002Ftag\u002Fdefi\">DeFi\u003C\u002Fa> uses smart contracts on public blockchains to offer lending, trading, and yield without banks or brokers.\u003C\u002Fp>\u003Cp>\u003Ca href=\"https:\u002F\u002Fen.wikipedia.org\u002Fwiki\u002FDecentralized_finance\" target=\"_blank\" rel=\"noopener\">Decentralized finance\u003C\u002Fa>, or DeFi, now moves real money through software instead of bank accounts. The sector hit more than \u003Cstrong>$180 billion\u003C\u002Fstrong> in total value locked in 2021, then fell below \u003Cstrong>$40 billion\u003C\u002Fstrong> by 2023, which tells you how fast this market can inflate and unwind.\u003C\u002Fp>\u003Ctable>\u003Cthead>\u003Ctr>\u003Cth>Metric\u003C\u002Fth>\u003Cth>Value\u003C\u002Fth>\u003Cth>What it shows\u003C\u002Fth>\u003C\u002Ftr>\u003C\u002Fthead>\u003Ctbody>\u003Ctr>\u003Ctd>Total value locked peak\u003C\u002Ftd>\u003Ctd>$178 billion\u003C\u002Ftd>\u003Ctd>DeFi’s high-water mark in November 2021\u003C\u002Ftd>\u003C\u002Ftr>\u003Ctr>\u003Ctd>Combined DAI and USDS supply\u003C\u002Ftd>\u003Ctd>About $9 billion\u003C\u002Ftd>\u003Ctd>Scale of MakerDAO’s stablecoin system in March 2025\u003C\u002Ftd>\u003C\u002Ftr>\u003Ctr>\u003Ctd>Collateral after the 2021 peak\u003C\u002Ftd>\u003Ctd>Under $40 billion\u003C\u002Ftd>\u003Ctd>How sharply activity cooled by 2023\u003C\u002Ftd>\u003C\u002Ftr>\u003Ctr>\u003Ctd>Crypto market value cited by regulators\u003C\u002Ftd>\u003Ctd>$2.5 trillion\u003C\u002Ftd>\u003Ctd>The size of the broader risk regulators were watching in 2022\u003C\u002Ftd>\u003C\u002Ftr>\u003C\u002Ftbody>\u003C\u002Ftable>\u003Ch2>DeFi replaces middlemen with code\u003C\u002Fh2>\u003Cp>At its core, DeFi is a stack of financial apps built on blockchains such as \u003Ca href=\"https:\u002F\u002Fethereum.org\" target=\"_blank\" rel=\"noopener\">Ethereum\u003C\u002Fa>. Instead of routing trades, loans, and interest payments through a bank or broker, users interact with \u003Ca href=\"https:\u002F\u002Fethereum.org\u002Fen\u002Fdevelopers\u002Fdocs\u002Fsmart-contracts\u002F\" target=\"_blank\" rel=\"noopener\">smart contracts\u003C\u002Fa> that execute rules automatically.\u003C\u002Fp>\n\u003Cfigure class=\"my-6\">\u003Cimg src=\"https:\u002F\u002Fxxdpdyhzhpamafnrdkyq.supabase.co\u002Fstorage\u002Fv1\u002Fobject\u002Fpublic\u002Fcovers\u002Finline-1781180294194-pzwv.png\" alt=\"DeFi runs finance on public blockchains\" class=\"rounded-xl w-full\" loading=\"lazy\" \u002F>\u003C\u002Ffigure>\n\u003Cp>That design changes who controls the product. A lending app can accept collateral, set interest rates, and liquidate risky positions without a human desk in the middle. A trading app can match buyers and sellers through code. A savings app can route deposits into pools that pay variable returns.\u003C\u002Fp>\u003Cp>The basic promise is access. Anyone with a wallet and an internet connection can use these systems, which is why DeFi has drawn attention in countries where banking access is limited or expensive. The tradeoff is that users also inherit the risks of the code itself, plus the volatility of crypto assets.\u003C\u002Fp>\u003Cul>\u003Cli>Loans are often overcollateralized, so users deposit more value than they borrow.\u003C\u002Fli>\u003Cli>Interest rates can move quickly because they follow supply and demand in the pool.\u003C\u002Fli>\u003Cli>Smart contract bugs can freeze funds or let attackers drain them.\u003C\u002Fli>\u003Cli>Price swings can trigger liquidations even when the protocol is working as designed.\u003C\u002Fli>\u003C\u002Ful>\u003Ch2>MakerDAO, Compound, and the yield boom\u003C\u002Fh2>\u003Cp>The first big DeFi wave came from lending and \u003Ca href=\"\u002Ftag\u002Fstablecoins\">stablecoins\u003C\u002Fa>. \u003Ca href=\"https:\u002F\u002Fmakerdao.com\" target=\"_blank\" rel=\"noopener\">MakerDAO\u003C\u002Fa> launched in 2017 and let users borrow \u003Ca href=\"https:\u002F\u002Fmakerdao.com\u002Fen\u002Fsavings-dai\" target=\"_blank\" rel=\"noopener\">DAI\u003C\u002Fa>, a dollar-pegged \u003Ca href=\"\u002Ftag\u002Ftoken\">token\u003C\u002Fa> created by smart contracts. In September 2024, MakerDAO rebranded as \u003Ca href=\"https:\u002F\u002Fsky.money\" target=\"_blank\" rel=\"noopener\">Sky\u003C\u002Fa>, and DAI became USDS.\u003C\u002Fp>\u003Cp>Then \u003Ca href=\"https:\u002F\u002Fcompound.finance\" target=\"_blank\" rel=\"noopener\">Compound Finance\u003C\u002Fa> made lending feel more like a market. In June 2020, it began rewarding lenders and borrowers with COMP, its governance token. That kicked off a rush of “yield farming,” where users moved capital from pool to pool chasing interest, fees, and token rewards.\u003C\u002Fp>\u003Cblockquote>“The most important thing to understand about DeFi is that it’s about trust minimization, not trust elimination.” — \u003Ca href=\"https:\u002F\u002Fwww.linkedin.com\u002Fin\u002Fvitalik-buterin\" target=\"_blank\" rel=\"noopener\">Vitalik Buterin\u003C\u002Fa>\u003C\u002Fblockquote>\u003Cp>But that rush also exposed the sector’s weakest points. DeFi apps can promise high returns, yet they depend on code quality, price feeds, and liquidity that can vanish during stress. The same mechanics that make them efficient also make them brittle when markets turn.\u003C\u002Fp>\u003Cp>A few numbers make the boom-and-bust cycle easy to see:\u003C\u002Fp>\u003Cul>\u003Cli>Compound’s COMP rewards helped turn lending into a speculative strategy in 2020.\u003C\u002Fli>\u003Cli>Bloomberg reported in September 2020 that DeFi accounted for two-thirds of crypto market price changes.\u003C\u002Fli>\u003Cli>DeFi collateral reached $178 billion in November 2021.\u003C\u002Fli>\u003Cli>That figure dropped to under $40 billion by 2023 after the broader crypto downturn.\u003C\u002Fli>\u003C\u002Ful>\u003Ch2>Security failures and fake decentralization\u003C\u002Fh2>\u003Cp>DeFi’s biggest problem is not just volatility. It is code risk. Wikipedia’s summary of the field is blunt: coding errors and hacks are common. Flash loans, which let users borrow large sums and repay them in a single transaction, made that risk worse because attackers could borrow capital, distort prices, and exploit a protocol before the transaction ended.\u003C\u002Fp>\n\u003Cfigure class=\"my-6\">\u003Cimg src=\"https:\u002F\u002Fxxdpdyhzhpamafnrdkyq.supabase.co\u002Fstorage\u002Fv1\u002Fobject\u002Fpublic\u002Fcovers\u002Finline-1781180289901-zkvi.png\" alt=\"DeFi runs finance on public blockchains\" class=\"rounded-xl w-full\" loading=\"lazy\" \u002F>\u003C\u002Ffigure>\n\u003Cp>\u003Ca href=\"https:\u002F\u002Faave.com\" target=\"_blank\" rel=\"noopener\">Aave\u003C\u002Fa> helped popularize flash loans, and they became a favorite tool for attackers trying to manipulate markets. The lesson is simple: when settlement is automated and fast, a bug can become an exploit in minutes.\u003C\u002Fp>\u003Cp>There is also a deeper governance problem. Some projects claim to be decentralized while keeping key controls in a small group of hands. That creates what DeFi researchers and regulators call false decentralization. If a protocol can be changed by a tiny insider set, it may be treated like a financial intermediary anyway.\u003C\u002Fp>\u003Cp>That matters because the label changes the legal and technical risk profile. A truly decentralized protocol can act more like neutral infrastructure. A half-decentralized one can still be vulnerable to manipulation, admin-key abuse, or regulatory pressure aimed at a central operator.\u003C\u002Fp>\u003Cul>\u003Cli>Flash loans can be used for arbitrage, but also for price manipulation.\u003C\u002Fli>\u003Cli>Admin keys can rescue a protocol, then become a single point of failure.\u003C\u002Fli>\u003Cli>Oracles can feed bad prices into otherwise correct contracts.\u003C\u002Fli>\u003Cli>Cross-chain bridges can widen access while adding more attack surface.\u003C\u002Fli>\u003C\u002Ful>\u003Ch2>Regulation is forcing DeFi to adapt\u003C\u002Fh2>\u003Cp>By 2024, regulation had become impossible to ignore. The European Union’s \u003Ca href=\"https:\u002F\u002Ffinance.ec.europa.eu\u002Fregulation-and-supervision\u002Ffinancial-services-legislation\u002Fmarkets-crypto-assets-mica_en\" target=\"_blank\" rel=\"noopener\">MiCA\u003C\u002Fa> framework began shaping stablecoin issuers and custodial services, and many DeFi teams started adding off-chain compliance layers. That does not make the systems traditional finance, but it does mean pure permissionlessness is getting harder to maintain at scale.\u003C\u002Fp>\u003Cp>Projects are responding in practical ways. Some are building hybrid models that keep the settlement layer on-chain while moving identity checks, risk scoring, or user screening off-chain. Others are adding decentralized identity tools such as \u003Ca href=\"https:\u002F\u002Fworldcoin.org\" target=\"_blank\" rel=\"noopener\">Worldcoin\u003C\u002Fa> and \u003Ca href=\"https:\u002F\u002Fpolygon.technology\u002Fpolygon-id\" target=\"_blank\" rel=\"noopener\">Polygon ID\u003C\u002Fa> to support lightweight KYC or on-chain credit scoring.\u003C\u002Fp>\u003Cp>Interoperability is improving too. \u003Ca href=\"https:\u002F\u002Fwww.wormhole.com\" target=\"_blank\" rel=\"noopener\">Wormhole\u003C\u002Fa> and \u003Ca href=\"https:\u002F\u002Fchain.link\u002Fcross-chain","DeFi uses smart contracts on public blockchains to offer lending, trading, and yield without banks or brokers.","en.wikipedia.org","https:\u002F\u002Fen.wikipedia.org\u002Fwiki\u002FDecentralized_finance",null,"https:\u002F\u002Fxxdpdyhzhpamafnrdkyq.supabase.co\u002Fstorage\u002Fv1\u002Fobject\u002Fpublic\u002Fcovers\u002Finline-1781180294194-pzwv.png","blockchain","en","854c58eb-854c-4f9d-9c33-e22e387f3742",[17,18,19,20,21],"DeFi","smart contracts","MakerDAO","Compound Finance","Ethereum",[23,24,25,26],"DeFi replaces banks and brokers with smart contracts on public blockchains.","The biggest DeFi growth came from lending, stablecoins, and yield farming.","Security flaws, flash loans, and weak governance remain the main risks.","Regulation is pushing many DeFi projects toward hybrid compliance models.",0,"2026-06-11T12:17:32.018169+00:00","2026-06-11T12:17:32.011+00:00","9296fb57-d8ad-4ccd-aa0e-d1cd8bb68a3d",{"tags":32,"relatedLang":43,"relatedPosts":47},[33,35,37,39,41],{"name":20,"slug":34},"compound-finance",{"name":36,"slug":36},"ethereum",{"name":19,"slug":38},"makerdao",{"name":18,"slug":40},"smart-contracts",{"name":17,"slug":42},"defi",{"id":15,"slug":44,"title":45,"language":46},"defi-runs-finance-on-public-blockchains-zh","DeFi 就是在公鏈上跑金融","zh",[48,54,60,66,72,78],{"id":49,"slug":50,"title":51,"cover_image":52,"image_url":52,"created_at":53,"category":13},"a4fd1fc6-f4c6-49ba-8421-76fd5847c08b","rwa-tokenization-assets-on-chain-en","RWA tokenization is moving assets on-chain","https:\u002F\u002Fxxdpdyhzhpamafnrdkyq.supabase.co\u002Fstorage\u002Fv1\u002Fobject\u002Fpublic\u002Fcovers\u002Finline-1781260388801-5q84.png","2026-06-12T10:32:38.344566+00:00",{"id":55,"slug":56,"title":57,"cover_image":58,"image_url":58,"created_at":59,"category":13},"df7e107b-f2df-49f3-a93c-23704ed4fe21","stablecoin-development-companies-2026-regulated-launches-en","5 stablecoin developers for regulated launches","https:\u002F\u002Fxxdpdyhzhpamafnrdkyq.supabase.co\u002Fstorage\u002Fv1\u002Fobject\u002Fpublic\u002Fcovers\u002Finline-1781243278688-gb3e.png","2026-06-12T05:47:22.783836+00:00",{"id":61,"slug":62,"title":63,"cover_image":64,"image_url":64,"created_at":65,"category":13},"d2db3da7-595c-4cdc-a4fa-8c9ff2e41dc5","cnbc-crypto-world-turns-news-into-brief-en","CNBC Crypto World turns news into a crypto brief","https:\u002F\u002Fxxdpdyhzhpamafnrdkyq.supabase.co\u002Fstorage\u002Fv1\u002Fobject\u002Fpublic\u002Fcovers\u002Finline-1781235195517-mbyr.png","2026-06-12T03:32:49.213004+00:00",{"id":67,"slug":68,"title":69,"cover_image":70,"image_url":70,"created_at":71,"category":13},"428e053c-d49f-4dd6-bcf7-3f14732a0950","web3-wallets-financial-super-apps-en","Web3 Wallets Should Become Financial Super Apps","https:\u002F\u002Fxxdpdyhzhpamafnrdkyq.supabase.co\u002Fstorage\u002Fv1\u002Fobject\u002Fpublic\u002Fcovers\u002Finline-1781200073874-n3dr.png","2026-06-11T17:47:23.565924+00:00",{"id":73,"slug":74,"title":75,"cover_image":76,"image_url":76,"created_at":77,"category":13},"e633be9d-ae03-43a1-8725-0ee69f1a9113","clarity-act-floor-vote-prep-crypto-teams-en","CLARITY Act floor vote prep for crypto teams","https:\u002F\u002Fxxdpdyhzhpamafnrdkyq.supabase.co\u002Fstorage\u002Fv1\u002Fobject\u002Fpublic\u002Fcovers\u002Finline-1781181193142-b9le.png","2026-06-11T12:32:32.230274+00:00",{"id":79,"slug":80,"title":81,"cover_image":82,"image_url":82,"created_at":83,"category":13},"35c09b13-4c71-4baf-a2c8-391c35dca6ca","institutional-defi-middle-layer-compliance-en","Institutional DeFi Works Once the Middle Layer Exists","https:\u002F\u002Fxxdpdyhzhpamafnrdkyq.supabase.co\u002Fstorage\u002Fv1\u002Fobject\u002Fpublic\u002Fcovers\u002Finline-1781179403278-i1om.png","2026-06-11T12:02:28.043645+00:00",[85,90,95,100,105,110,115,120,125,130],{"id":86,"slug":87,"title":88,"created_at":89},"cdf2780b-1da6-4aca-a87b-f0974b815b03","moonpay-open-wallet-standard-ai-payments-en","MoonPay's Open Wallet Standard Targets AI 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