Defi Needs Higher Certainty, Not Higher Yield

High yields mean nothing without execution certainty. Institutional DeFi adoption demands predictable transactions over speculative returns at scale.

Opinion by: Robin Nordnes, co-founder and CEO of Raiku

Many decentralized finance (DeFi) diehards assume that the future of institutional adoption will be driven by sparkly, sky-high yields. The reality is that the mainstream will be most impressed with consistency and reliability.

DeFi opened the door for ordinary people to access financial tools that were previously reserved for institutions. For the first time, anyone could invest their money in open markets from anywhere in the world. That was a massive step forward. The same openness that made this possible came with a trade-off. Decentralization gave us freedom, but it sometimes meant unpredictability.

Now it is time to close that gap. The next chapter of DeFi is about building systems that are as consistent as the apps we use every day. When crypto becomes as dependable as Web2, it will invite entire industries to move onchain. That’s what we need if we’re actually going to onboard the next billion users.

DeFi has always thrived on yield. It was the hook that pulled millions in. The idea that your assets could earn while you sleep was powerful, and it worked. Yield only matters, however, when the foundation underneath it holds steady. If execution is unpredictable, the numbers on the screen are just an illusion.

Retail investors might ignore that, but the world we are trying to onboard isn’t going to. Institutions, funds and businesses care about precision, and they will not build on shaky ground. The final piece of the puzzle is making crypto apps that are as consistent and predictable as the Web2 apps we trust and use daily.

In 2020, mass DeFi adoption was predicted to happen somewhere between 2023 and 2025.

Now that 2025 is almost over, it’s pretty clear that we’re only marginally closer to this goal now than we were then. As crypto gradually becomes more important in the broader financial sphere, we need to properly acknowledge the risks that institutions are wary of.Related: Brazilian stablecoin opens door to country’s double-digit yields

Yes, DeFi has grown, and yield is grabbing the attention of everyday investors. We can’t expect institutions to onboard with the promise of 5% yield that comes with the risk of system collapse.

Source: CoinTelegraph