Close Menu
  • Coins
    • Bitcoin
    • Ethereum
    • Altcoins
    • NFT
  • Blockchain
  • DeFi
  • Metaverse
  • Regulation
  • Other
    • Exchanges
    • ICO
    • GameFi
    • Mining
    • Legal
  • MarketCap
What's Hot

StarAI and INTO Collaborate to Revolutionize the Future of Web3 Interactions

06/08/2025

Retail XRP Holders Can Now Tap DeFi on Flare, No Seed Phrase Needed

06/08/2025

$372,000,000 in BlackRock’s Ethereum ETF Stuns Coinbase Prime, More Sell-off?

06/08/2025
Facebook X (Twitter) Instagram
  • Back to NBTC homepage
  • Privacy Policy
  • Contact
X (Twitter) Telegram Facebook LinkedIn RSS
NBTC News
  • Coins
    1. Bitcoin
    2. Ethereum
    3. Altcoins
    4. NFT
    5. View All

    Price Breaks All-Time High Record Again – Here’s What We Know

    04/08/2025

    Bitcoin Switzerland? El Salvador to Host First Fully Native Bitcoin Capital Markets

    04/08/2025

    Bitcoin Breaks $119K, but XLM and HBAR Aren’t Impressed by Its Meager Percentage Gain

    04/08/2025

    High-Stakes Consolidation Could Define Q3 Trend

    04/08/2025

    $372,000,000 in BlackRock’s Ethereum ETF Stuns Coinbase Prime, More Sell-off?

    06/08/2025

    Ethereum price prediction 2030: Is $10K realistic?

    06/08/2025

    Ethereum Is ‘Superior,’ Fundstrat’s Tom Lee Says

    06/08/2025

    Ethereum proposes unified fee market to simplify transaction costs

    06/08/2025

    The Sui Ecosystem’s Top 3 Altcoin Performers

    29/07/2025

    Floki Launches $69000 Guerrilla Marketing Challenge With FlokiUltras3

    28/07/2025

    Crypto Beast denies role in Altcoin (ALT) crash rug pull, blames snipers

    28/07/2025

    $1.6 Billion XRP Surge: Here’s What’s Unfolding

    28/07/2025

    Cloudflare Accuses Perplexity AI of Using Stealth Crawlers to Evade Website Blocks

    05/08/2025

    CryptoPunks and Pudgy Penguins Draw Major Sales

    04/08/2025

    NFT Sales Spike in July—but Still Miles Below 2024’s Highs

    03/08/2025

    Ethereum Collections Lead NFT Sales Today

    03/08/2025

    StarAI and INTO Collaborate to Revolutionize the Future of Web3 Interactions

    06/08/2025

    Retail XRP Holders Can Now Tap DeFi on Flare, No Seed Phrase Needed

    06/08/2025

    $372,000,000 in BlackRock’s Ethereum ETF Stuns Coinbase Prime, More Sell-off?

    06/08/2025

    Billionaire Ray Dalio Calls for Overhaul of US Government Economic Data Estimates Amid BLS Controversy

    06/08/2025
  • Blockchain

    StarAI and INTO Collaborate to Revolutionize the Future of Web3 Interactions

    06/08/2025

    Blockchain technology can help decentralize the US energy grid — VC

    06/08/2025

    Base’s Jesse Pollak Rallies Support to Back On-Chain Creator Coin Index

    06/08/2025

    Spheron and OpenGradient Unite to Decentralize AI Model Deployment

    06/08/2025

    Tokenization Specialist Centrifuge Appoints Former Goldman Sachs Executive as COO

    06/08/2025
  • DeFi

    Retail XRP Holders Can Now Tap DeFi on Flare, No Seed Phrase Needed

    06/08/2025

    MYX’s Price Surges 477% amid $9.9 Million Short Liquidations and Broader Token Bullishness 

    06/08/2025

    Jupiter launches private beta for Jupiter Lend

    06/08/2025

    Pendle Lets Crypto Traders Bet on Bitcoin, Ether Funding Rates With Boros Platform

    06/08/2025

    Chainlink Introduces State Pricing to Improve Onchain Asset Valuation

    05/08/2025
  • Metaverse

    Where Has the Metaverse Gone? Examining a Failed (and Costly) Trend

    01/08/2025

    From Metaverse to Machine Learning, Inside Meta’s $72 Billion AI Gamble

    31/07/2025

    AntVerse Integrates Terminus to Transform AI-Powered Metaverse with Web3 Payments

    25/07/2025

    The Sandbox Launches Largest LAND Auction Using GBM Protocol

    21/07/2025

    Elon Musk’s xAI Quietly Fixed Grok by Deleting a Line of Code

    09/07/2025
  • Regulation

    Billionaire Ray Dalio Calls for Overhaul of US Government Economic Data Estimates Amid BLS Controversy

    06/08/2025

    Semler Scientific Stock SMLR Rises After Bitcoin Gains Fuel Q2 Results

    06/08/2025

    The ‘jobs’ number is always wrong

    06/08/2025

    South Korea’s Tech Giant Unveils Bold Blockchain Initiative

    06/08/2025

    Powell Rate Cut Odds Hit 92%, Markets Eye Rally

    06/08/2025
  • Other
    1. Exchanges
    2. ICO
    3. GameFi
    4. Mining
    5. Legal
    6. View All

    DEX trading volume tops $1T for the first time in July, Hyperliquid leads record perp surge

    05/08/2025

    Coinbase to Delist Popular Cryptocurrency This August: Details

    05/08/2025

    Binance Sends Millions in Crypto to Wintermute Amid Transparency Questions

    05/08/2025

    Bitcoin Exchange Binance Deletes Numerous Altcoin Trading Pairs from Margin Trading! Here Are the Details

    05/08/2025

    ICO for bitcoin yield farming chain Corn screams we’re so back

    22/01/2025

    Why 2025 Will See the Comeback of the ICO

    26/12/2024

    Shrapnel to Leave Avalanche in New Partnership with Gala Games

    05/08/2025

    Google to Pit Top AI Models Against Each Other in Live Chess Tournament

    05/08/2025

    The Biggest Games Releasing in August 2025

    03/08/2025

    TaskOn Joins EPHYRA to Elevate AI-Powered Gaming Experience

    02/08/2025

    A Phenomenal 671 BTC Haul in July

    06/08/2025

    Whale Who Bet Against XRP Liquidated, Dogecoin Futures on Coinbase Spike 24%, Bitcoin Mining Difficulty Hits ATH – Crypto News Digest

    06/08/2025

    Bitcoin Mining Is the Resurrection Of the Working-Class Hero

    06/08/2025

    Core Scientific investors expected to resist CoreWeave’s merger bid

    05/08/2025

    SEC Chief Paul Atkin’s Project Crypto Flying Under Radar Amid Market Selloff: Bernstein

    06/08/2025

    Plume Recognized in White House Digital Asset Policy Report

    06/08/2025

    Did China ban crypto (again)? Here’s why the myth won’t die

    06/08/2025

    the new era of crypto regulation has just begun

    06/08/2025

    StarAI and INTO Collaborate to Revolutionize the Future of Web3 Interactions

    06/08/2025

    Retail XRP Holders Can Now Tap DeFi on Flare, No Seed Phrase Needed

    06/08/2025

    $372,000,000 in BlackRock’s Ethereum ETF Stuns Coinbase Prime, More Sell-off?

    06/08/2025

    Billionaire Ray Dalio Calls for Overhaul of US Government Economic Data Estimates Amid BLS Controversy

    06/08/2025
  • MarketCap
NBTC News
Home»DeFi»DeFi needs more decentralization
DeFi

DeFi needs more decentralization

NBTCBy NBTC20/02/2024No Comments5 Mins Read
Share
Facebook Twitter LinkedIn Pinterest Email


Amid all the ETF news that’s dominated the headlines over the last few weeks, the extensive report into DeFi published by the US Commodity Futures Trading Commission in early January didn’t get enough attention.

Most of the news coverage focused on the report’s recommendations about implementing identity and AML practices, but this was only part of the document’s broad scope.

Developed by the Commission’s subcommittee on digital assets and blockchain technology, the 79-page report dives deep into the risks presented by the emerging decentralized financial system.

Especially revealing is its assessment of how effectively these risks can be addressed within the confines of regulation by using multiple levers of decentralization.

The prevailing view — even from within the crypto space — is that DeFi will need to clean up its act and accept regulation. And in light of the direction of the crypto industry overall, regulation of some sort does indeed seem inevitable.

But this report seems to go a step further — finally spelling out that permissionless innovation is an inherent trade-off if the broader benefits of DeFi are to be discovered and captured.

DeFi founders must be willing to embrace the full extent of decentralization in their own projects as a way of increasing resilience and mitigating regulatory risk. This idea runs in opposition to the prevailing perception in DeFi — that decentralized projects face the biggest regulatory risks. In fact, ceding every aspect of control to a decentralized community while embracing decentralized infrastructure and partners will demonstrate that the project doesn’t contravene established regulations.

Recommended reading for founders

While it’s directed at policymakers, this report should be recommended reading for all DeFi founders. The CFTC’s report proposes a framework that could assess DeFi protocols and specific risks not found in traditional finance, like code vulnerabilities or rug pulls.

Read more from our opinion section: Washington shouldn’t give in to crypto panic

Using the report’s objective framework, founders could analyze the extent to which their own projects are actually decentralized in all their different parts. While governance and token ownership are well-established levers of decentralization, development and operations are frequently more centralized in practice, dependent on only a few companies for infrastructure and building activities.

The CFTC report also provides insight into the many areas where regulators consider DeFi to present financial risk, which can be interpreted as points of regulatory weakness for DeFi protocols and founders.

Our industry tends to focus obsessively on know-your-customer (KYC) as a synonym for compliance, often at the risk of oversimplifying the complexity of regulatory exposure. In this respect, founders can also use the report as a way to view their own project through a regulator’s lens and see where they actually fall behind in compliance.

No hard lines

Ultimately, the many dimensions of decentralization make it impossible to present a hard line in determining if a project is “sufficiently” decentralized. Here, founders and regulators share the same challenge.

However, deciding where to draw the line isn’t simply a matter of eliminating risk. Going too far with regulation in DeFi could be detrimental if it risks stifling innovation, and governments will be keen to capture as many of the upsides as possible, which may mean accepting some risks.

Read more from our opinion section: C is for crypto, but the CFTC didn’t get the memo

Founders may also need to reconsider their own ideas of personal and professional success, since the presence of a founder with enough control above other token holders will be an indicator of centralization. Therefore, while career success in DeFi is likely to come with its own kudos, it may need to take a different trajectory than that of the billionaire rockstar founders that dominate centralized tech firms.

Furthermore, decentralizing control does come with the risk that the community may decide to act against the interests of the founder or even the project itself (one such case is AragonDAO, which previously voted to sue its founders, the Aragon Association — one of the factors that led to its collapse last year).

The report’s call to action for DeFi founders is to establish and nurture truly decentralized systems that showcase the strengths of decentralization as best as possible.

Since DeFi regulation in the future may be on the cards, better collaboration between the industry and policymakers is undoubtedly a positive move. Fully decentralized innovation will remain the key driver of the ecosystem for the foreseeable future.


Rishabh Gupta is the Director of Operations of TDeFi, a Web3 incubator and consulting firm dedicated to promoting the adoption of Web3 technologies. TDeFi has successfully guided 60 companies through the token markets, of which three have achieved a $1 billion market cap. Rishabh’s expertise extends to advising 70+ token companies in designing sustainable token economics, crafting token supply curves, and assisting 5 VC funds and 500 angel investors in deploying capital within the Token startup space.

Share. Facebook Twitter Pinterest LinkedIn Tumblr Email
NBTC

Related Posts

Retail XRP Holders Can Now Tap DeFi on Flare, No Seed Phrase Needed

06/08/2025

MYX’s Price Surges 477% amid $9.9 Million Short Liquidations and Broader Token Bullishness 

06/08/2025

Jupiter launches private beta for Jupiter Lend

06/08/2025

Pendle Lets Crypto Traders Bet on Bitcoin, Ether Funding Rates With Boros Platform

06/08/2025
Add A Comment

Comments are closed.

Top Posts
Get Informed

Subscribe to Updates

Get the latest news from NBTC regarding crypto, blockchains and web3 related topics.

Your source for the serious news. This website is crafted specifically to for crazy and hot cryptonews. Visit our main page for more tons of news.

We're social. Connect with us:

Facebook X (Twitter) LinkedIn RSS
Top Insights

StarAI and INTO Collaborate to Revolutionize the Future of Web3 Interactions

06/08/2025

Retail XRP Holders Can Now Tap DeFi on Flare, No Seed Phrase Needed

06/08/2025

$372,000,000 in BlackRock’s Ethereum ETF Stuns Coinbase Prime, More Sell-off?

06/08/2025
Get Informed

Subscribe to Updates

Get the latest news from NBTC regarding crypto, blockchains and web3 related topics.

Type above and press Enter to search. Press Esc to cancel.