What Brings Capital Back to DeFi? | Roundup

Hosts dissect DeFi's security crisis, capital flight, and the path to institutional‑grade on‑chain finance—covering RWAs, agent distribution, and inevitable consolidation.

Key Takeaways

Security failures and centralized single points (one‑of‑one multisigs, layer‑zero bridges) caused contagion; prioritise bridge and smart‑contract hardening and continuous red‑team testing.
Capital is fleeing DeFi into treasuries and off‑chain custody (Aave deposits fell ~$45B→$30–31B); protocols must demonstrably reduce risk to win deposits back.
Real‑world assets (RWAs) and RWA‑looping will drive deposits when yields align; integrate compliant RWAs and clear legal frameworks to attract institutional liquidity.
Agents, institutional curators, and liability‑bearing platforms will control distribution; build agent‑friendly APIs, explicit liability models, and audited custody to onboard large funds.
Consolidation is coming: many startups will fail while security‑savvy, finance‑competent teams scale via M&A or vertical integration—prepare for tighter counterparty controls.
Regulatory and UX tradeoffs demand pragmatic compromises: add KYC/AML hooks, circuit breakers, and permissioned controls where needed, accepting some composability loss to enable adoption.

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