DeFi is maturing. The TVL figures are on the rise. Protocols are establishing deeper roots, and traditional finance is climbing a higher wall, looking at what’s being cultivated with curiosity and interest at the other side. Let’s not go overboard in being impressed with the impressiveness. The question isn’t whether or not DeFi is expanding. It’s who is really profiting from this multi-tiered expansion. Which is it, the individual around the corner in Accra who can’t get basic financial services, or Wall Street in drag?

DeFi's Promise, A Mirage For Some?

We’ve all gotten caught up in the hype around “financial inclusion,” “financial freedom,” and “democratization of finance.” It sounds incredible, doesn’t it? The promise of delivery, to all, everywhere, of lending, trading, investment opportunities that were only around behind the gatekeepers of monetary traditionalism. Just how accessible is DeFi to someone without a smartphone, consistent internet connection, or basic financial literacy?

I see the data about stablecoins generating millions in revenue, DEXs outpacing centralized exchanges in volume, and lending protocols holding the lion’s share of TVL. These are impressive numbers. But who's driving those numbers? Do these metrics really serve the needs of the unbanked? Or do they simply enrich the wealthy — those who already have capital and technical know-how? Yet, it’s easy to get distracted by how new, shiny and exciting this technology is. The actual difficulty is figuring out what it means for people’s lives.

Think of it like this: imagine building a magnificent library filled with the most incredible books imaginable. But then you’ve just opened the doors only to those who already speak Latin and have a PhD in literature. Is that really democratizing knowledge? DeFi risks falling into the same trap. We're building incredible infrastructure, but are we ensuring that everyone has the tools and knowledge to use it?

The Danger Of TradFi Integration

The hype of traditional finance coming into DeFi is at a fevered pitch. Banks are already experimenting with stablecoin settlements, and financial institutions have been attracted by DeFi’s open-source infrastructure. On the surface, this would seem like DeFi’s natural evolution, a validation of DeFi’s potential. I’m filled with an incredible dread whenever I think about it.

The real promise of DeFi was never just in the code, it was in decentralization—in getting out from under the thumb of centralized institutions. What’s more, what do they do when those same institutions begin to co-opt that technology. Are we simply reproducing the same inequitable power dynamics under a new, glossy interface? Or will DeFi’s benefits accrue only to a few big players, with everyone else shut out of the new ecosystem?

We should be careful not to let the “compliance” story that’s powering this integration too, dominate our response to it. Yes, regulatory clarity is important. But achieving compliance with the law shouldn’t mean sacrificing decentralization and accessibility. If the price of TradFi adoption is a system that favors established institutions, then we’ve lost the core value proposition of DeFi.

Bridging The Gap, Not Widening It

So, what can we do? How do we ensure DeFi achieves its greatest promise and brings financial freedom to all corners of the earth? We must ensure it works for more than just the usual suspects.

Second, we need to prioritize utility and accessibility. What we really need to do is design DeFi protocols in ways that are approachable, intuitive and accessible to all…even those with little technical expertise. And that starts by taking action to democratize access—that is, making interfaces simpler, transaction fees cheaper, and educational resources available in several languages.

Second, we should actively bolster community-led efforts to promote financial inclusion. You can build culturally responsive apps. Offer education and fellowship opportunities in disadvantaged neighborhoods, and build frameworks so these communities can govern projects and dictate terms.

Third, regardless of the presence of AI technologies, we should engage to promote regulatory frameworks that support innovation and recognize the rights of vulnerable users. This will require a delicate dance between encouraging innovation and protecting against fraud and abuse. Regulators need to understand this space and the challenges and opportunities that come with it. Once they start that process, they should create rules that are equitable, transparent, and understandable to all.

It's not enough to build the technology. We’re going to have to create the empathy, the discomfort … and then the understanding to make sure everybody shares in that benefit. Otherwise, DeFi will become just another tool for the wealthy to accumulate more wealth, leaving the rest of us behind. The narrative of DeFi’s layered expansion does not need to be a zero sum tale — it can be a story of shared coincidence. The time to act is now.

  • Subsidized Gas Fees: Implement mechanisms to subsidize gas fees for users in developing economies.
  • Simplified Interfaces: Design user interfaces that are intuitive and easy to navigate, even for those with limited technical skills.
  • Localized Education: Create educational programs that are tailored to the specific needs and cultural contexts of different communities.
  • Community Grants: Establish grant programs to support community-led initiatives focused on financial inclusion.

It's not enough to build the technology. We need to build the empathy and the understanding to ensure that it benefits everyone. Otherwise, DeFi will become just another tool for the wealthy to accumulate more wealth, leaving the rest of us behind. The story of DeFi's layered growth shouldn't be one of exclusion, but one of shared prosperity. The time to act is now.