DeFi is where: * Lenders get sub-risk-free rates for risky lending * Borrowers are apparently unable to run profitable trades like “borrow at less than tbills and buy a tbill” * Active, multi-strategy credit funds with struggle to provide yield competitive with an FDIC-insured savings account What are we even doing here? Are we all just trapped onchain with no way out? Even if the lenders are stuck, why are the borrowers not able to sustain very low borrow rates by real-world standards? And it’s not like we even built a DeFi that does what it was built for, which might justify the friction and low capacity for competent capital allocation. We were all on the censorship resistant, permissionless finance highway, and then the wannabe hedge fund guys grabbed the wheel and drove us into the ditch because “non-custodial software” didn’t earn them performance fees for underperforming Treasuries. It’s not even that centralized entities or replicating many TradFi structures onchain is sinful or shameful. They’re not. DeFi, CeFi, and TradFi can coexist. It’s that the onchain economy is apparently so unhealthy that the only way to remotely give lenders a reward in line with risk is via massive subsidies. All these gigantic Earn initiatives are money flowing the wrong way, swamping an already overcapitalized DeFi market where we apparently are incapable of scaling any product that’s not minute-by-minute margin or perps, the latter of which is zero-to-negative-sum and closed off from composability, so may as well be offchain from a macro perspective. RWAs were supposed to save us by letting yield flow from offchain markets to investors onchain. But all we got were “tokenized tbills” that were just nosebleed fees slapped onto a money market fund. I’m still waiting for these actual tbills so I can build a ladder of them without paying a middleman or three 60 bps of the 360 bps tbill yield. One gets the impression that onchain markets are only kept from draining into the real world by an invisible dam of CEXs’ and banks’ arbitrary freezing of funds keep people scared to off-ramp. DPRK can get the money out somehow but there’s not enough borrowers able to withstand a sub-5% borrow rate? Either there’s free money on the sidewalk or something is busted.