Decentralized finance (DeFi) has been choking the Ethereum network, but not in the way most analysts guessed. Ethereum is not what it used to be. In 2016, Ethereum was still a proof of concept, ETC could plausibly claim to be a better vision of how the “world computer” should evolve. But today, it’s clear that ETH is valuable because of the systems that exist on top of it. Unlike Bitcoin, whose ledger is simple enough for forks to be functionally airdrops, ETH’s ecosystem is incredibly complex. Because its applications are intertwined with unworkable components, the entire system is rendered unenforceable. Any minority fork is doomed to obscurity.
DeFi is ultimately the kingmaker of any future governance crisis. Still, the chaos that would be unleashed by unravelling DeFi ties everyone else’s hands. With all of the new higher-level financial applications coming online in the next year, DeFi is liable only to become more fragile.
YASH B,
THIRM
