What's happening in DeFi is identical to what was happening in the Soviet Union after World War II.
Over 20 projects have shut down or wound down since the start of the year, including @AngleProtocol, @tallyxyz, @PolynomialFi, @parsec_finance, @Dmailofficial, etc.
It's the market pruning projects that relied on constant token emissions, low organic usage, or outdated models. Tech was often fine; liquidity and adoption weren't.
This purge is essential. What comes after is potential prosperity.
The Soviet Union never got genuine, sustained prosperity. Reconstruction (1946-1950, 1951-1955) boosted official stats temporarily, but inefficiencies compounded, leading to stagnation.
DeFi has better odds because of open competition, forkability, and real feedback loops. What are signs of getting better, though?
- Shift to real yield and sustainability (less reliance on inflationary APYs; more focus on revenue, fee-sharing models (e.g., @Uniswap fee activation discussions), and organic use)
- RWAs & institutions (see Tether Gold, BUIDL, thBILL, Fidelity)
- Technical and UX upgrades (scaling solutions, chain abstraction, AI agents)
Soviet reconstruction stayed trapped in top-down planning; thus, the misallocation persisted.
DeFi's destruction is market-driven and permissionless. Survivors iterate fast (forks, upgrades, new primitives). No Politburo vetoing profitable ideas. 😁
The destroying phase is painful (jobs lost in projects, bagholders in dead tokens, TVL dips), but it's the prerequisite for quality.
Without it, we'd keep propping up unsustainable models forever.
