Revisiting DeFi: The Present and Future of Web3's Most Mature Business Model Track
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Revisiting DeFi: The Present and Future of Web3's Most Mature Business Model Track
DeFi is essentially a return to the essence of finance, which is an information network.
Navigating Web3 tides with focused insightsHost: Alex, Research Partner at Mint Ventures
Guest: Mindao, Founder of dForce
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Hello everyone, welcome to WEB3 Mint To Be, brought to you by Mint Ventures. Here, we continuously question and deeply reflect, clarifying facts, understanding realities, and seeking consensus within the Web3 world. We aim to clarify the logic behind the headlines, provide insights that go beyond surface-level events, and introduce diverse perspectives.
This episode is the second in our series "The Present and Future of Web3 Sectors," where we explore DeFi—the most mature commercial sector in Web3. In the previous episode, we discussed Crypto AI. In upcoming episodes, we'll invite guests to discuss topics including Memes, Public Blockchains, DePIN, Gaming & Social, PayFi, and Web3 policy.
Alex: Today, we’re diving into DeFi. We have with us a true OG in the DeFi space—Mindao, founder of dForce. He’s been on our show before, when we talked about Aave and stablecoins. Let’s start by having Mindao greet our listeners.
Mindao: Hello everyone, great to be back on Mint Ventures talking about DeFi. It’s been a while since our last conversation, and the entire DeFi landscape has evolved significantly. I’m excited to share some reflections and summarize what’s happened lately.
Understanding and Explaining DeFi
Alex: Excellent, we’re looking forward to it. Many of our listeners are new to this industry or just starting to pay attention to Web3. So for those who haven’t fully entered the space yet—how would you explain DeFi to someone unfamiliar with crypto or Web3?
Mindao: I face this question every cycle—how to explain Bitcoin, Ethereum, and DeFi. Right now, with Bitcoin hitting new highs, many newcomers ask me what DeFi is. The good news is that most people already grasp Bitcoin as a decentralized currency or “digital gold.” So my go-to explanation is: if Bitcoin is money—a decentralized form of currency—then DeFi is like an expanded version of Bitcoin. It includes all the financial services we know from traditional finance: trading, payments, lending, banking—all built on blockchain. You can think of it as an application layer or extended version of Bitcoin. This analogy usually clicks quickly. Of course, if someone knows nothing about Bitcoin, I’d need to start from decentralization and permissionless access. But for most people today, comparing it to Bitcoin makes the core ideas of DeFi much easier to understand.
Alex: That makes sense. Then they often follow up: okay, Bitcoin as digital gold or non-sovereign asset makes sense, but traditional financial services seem pretty convenient already. What added value does DeFi offer?
Mindao: Coming from traditional finance myself, I can say that even insiders recognize how over-regulated it has become—opening a bank account is extremely difficult now. There's ongoing debate in the U.S. about tech entrepreneurs, especially in crypto, being de-banked entirely. Compared to 10–15 years ago, traditional financial services have actually become harder to use, with higher barriers and more friction. The key difference between traditional finance (TraDeFi) and DeFi lies in their essence: DeFi returns finance to its fundamental nature—as an information network. Traditional finance fragments this network through national regulations, institutional policies, and jurisdictional boundaries, creating massive transmission delays and resistance. DeFi restores it: finance *is* information. Whether you're trading, issuing assets, or borrowing, everything becomes seamless, unimpeded information flow—what we call "permissionless." This is DeFi’s biggest leap forward. When information flows at near-light speed without obstacles, capital efficiency becomes thousands of times greater than in traditional finance. We see this in practice: opening accounts across countries requires approvals; retail users can't easily trade both U.S. stocks and domestic/Russian equities simultaneously. But in DeFi, borders disappear. Information moves freely. In contrast, traditional finance slows information down so much it doesn’t even move at sound speed—every step has checkpoints: geographic, regulatory, interbank. From an efficiency standpoint, returning to this pure informational principle means DeFi is inherently orders of magnitude more efficient.
Current State of the DeFi Landscape
Alex: Understood. Let’s go deeper. DeFi has now gone through more than two full cycles. The real explosion of innovation was during the last cycle—2020 and 2021, known as DeFi Summer—when countless new projects emerged. Yet very few survived. And this cycle, the number of genuinely innovative new projects seems far lower. How would you assess the current state of the DeFi sector overall?
Mindao: The evolution of DeFi closely mirrors innovation patterns in technology and finance. Initially, there’s a burst of creativity—many narratives emerge because people don’t yet understand what works. During DeFi Summer, new financial mechanics appeared daily. But after intense competition settles, only a few proven categories remain. Looking across these cycles, the foundational primitives of DeFi haven’t changed much since 2019. Back then, we had Uniswap, MakerDAO, and Compound—the first to introduce pool-based lending. Aave, originally called Etherlend, started with P2P lending, which failed; later, it copied Compound’s model and succeeded. So the core building blocks were clear: stablecoins, AMMs, and lending protocols. Fast forward to today, and these three primitives still dominate. On top of them, we’ve seen variations: order books, concentrated liquidity models, improvements to AMMs, isolated lending pools—but fundamentally, they’re still rooted in those original three. Now, two interesting trends stand out. First, DeFi has become highly commoditized. Every new chain or Layer2 launches with the same trio: stablecoin, lending, AMM swap. These components are widely copied from open-source codebases like Uniswap and Aave. But here’s the twist: despite mass commoditization, concentration is increasing. For example, Uniswap dominates spot trading volume, and Aave leads in lending market share. So paradoxically, commoditization and centralization are happening simultaneously. That said, there *have* been new applications emerging—not at the primitive level, but in niche areas. This reflects a shift in how people view and build DeFi, moving beyond pure decentralization toward hybrid Ce-DeFi models. So while base-layer innovation has plateaued, new use cases continue to emerge thanks to improved infrastructure.
Alex: You mentioned the three pillars: stablecoins, lending, and AMM swaps. Derivatives have also been around for a while. Do you think derivatives are well-suited for DeFi? Are you bullish on their future development?
Mindao: This touches on a deeper question: what drives the evolution of DeFi? I often refer to a “first principle” of DeFi. The idea is that applications emerge first where resistance is highest. Take Ethereum Layer 1: high gas fees and low throughput limit what kinds of DeFi apps can run efficiently. That’s why early successful models were low-frequency ones—like lending and AMMs—which don’t require constant interaction. Why did Aave’s initial P2P lending fail? Because matching borrowers and lenders on-chain was too expensive and inefficient under high gas costs. Similarly, order book exchanges couldn’t work on Ethereum mainnet—dYdX tried it, then moved to StarkNet and eventually built an appchain. AMM worked; order books didn’t. The pattern is clear: DeFi evolves from low-frequency applications toward medium- and high-frequency ones as better-performing layers (Layer2s, new L1s, appchains) emerge. Perpetual futures, for instance, are inherently high-frequency—they thrive on centralized exchanges because CEXs support rapid execution. But now we’re seeing high-performance L1s, L2s, and appchains enabling native perpetual trading at scale—Base, Synthetix Futures, GMX on Arbitrum, and recently Hyperliquid (which, like dYdX, uses Cosmos SDK). These platforms prove that high-frequency DeFi apps are feasible. While current perpetual DEXs may not yet match Binance or OKX in performance, I believe they’ll get close. With appchains like Hyperliquid offering near-CEX experiences, DeFi perpetuals could eventually compete directly. Not one-to-one—we shouldn’t expect identical features—but in terms of user experience and performance, the gap will shrink dramatically.
Potential and Evolution of DeFi
Alex: You noted that since 2019, the core DeFi primitives haven’t changed much. Some say foundational innovation in DeFi is complete—that there won’t be major surprises ahead. This cycle hasn’t produced breakthrough products like DeFi Summer did. Yet others believe DeFi’s potential remains largely untapped. What’s your take? If DeFi still has significant room to grow, what factors might drive that growth, and how might it evolve?
Mindao: At the base layer, innovation has slowed because DeFi relies on blockchain architecture—block-by-block processing. Whether it’s Ethereum, Solana, or Layer2s, they all follow similar sequential models. However, the *understanding* of DeFi has shifted dramatically. Originally, DeFi meant “decentralized finance,” but now “decentralized” isn’t the focus anymore—it’s about **permissionless** access. This cycle saw meaningful innovations like Pendle and Ethena. Pendle introduced fixed-to-floating interest rate swaps—a kind of yield protocol. Ethena created USDE, a stablecoin using basis trading strategies—arbitraging spot vs. futures spreads on Bitcoin. This strategy has existed since Bitcoin’s early days, used internally by traders. Ethena democratized it, turning a proprietary tactic into a tokenized product accessible to anyone. Would past-cycle participants consider Ethena a DeFi project? Probably not—its operations rely heavily on centralized exchanges, and custody is handled off-chain via third parties. Structurally, it looks more CeFi than DeFi. But from a user perspective—anyone can mint, hold, or swap its tokens—it behaves like DeFi. We might call this De-CeFi or Ce-DeFi. Projects like this proliferated this cycle: liquid staking, RWA tokenization, etc. Crucially, these hybrid models contributed massively to the revival of DeFi TVL. The definition of DeFi has expanded—from purely decentralized systems to pragmatic hybrids blending centralized and decentralized elements. This evolution enables novel combinations. Purely ideological DeFi—like decentralized stablecoins or Ponzi-like schemes—has faded. But within this broader framework, new applications are flourishing with fast-growing TVL.
Solana’s DeFi Development Constraints
Alex: Earlier, you highlighted two shifts: redefining DeFi beyond decentralization, and emphasizing permissionless access and usability. One puzzle I’ve had: Solana differs greatly from Ethereum—fewer, more centralized nodes—while Vitalik emphasizes Ethereum’s distributed node network and censorship resistance. Yet from a user experience standpoint, decentralization matters less than availability and performance, where Solana excels. Despite this, Solana’s DeFi growth hasn’t matched its overall ecosystem momentum. Its DeFi TVL, stablecoin usage, and project adoption lag behind Ethereum’s metrics. Why has DeFi evolved slower on chains like Solana? What are the limiting factors?
Mindao: There’s a common misconception that fast chains automatically attract capital. Having built DeFi since 2019, I’ve learned that like any financial system, longevity builds stickiness. The longer a DeFi ecosystem runs, the higher its security threshold—and trust cost—becomes. Consider Ethereum’s ~$200B DeFi TVL: that’s $200 billion worth of bounty available to hackers. This level of security wasn’t achieved overnight—it came after cumulative losses possibly reaching tens of billions. That’s the moat. Solana can’t replicate this quickly. Also, user experience-wise, I don’t think chains like Base or Arbitrum fall far behind Solana. Gas fees on Base are often lower. The only downside? User confusion: Ethereum’s ecosystem is fragmented—Arbitrum, OP, Base, Superchain—too many names. Solana offers simplicity: one chain, no L1/L2 confusion. But fragmentation aside, Ethereum benefits from massive network effects: Solidity has the richest tooling, audit history, developer resources, and reusable components. Replicating that ecosystem is incredibly hard. Moreover, why might Ethereum’s multi-layer approach beat single-chain models like Solana long-term? Enterprises won’t deploy critical infrastructure directly on Solana. Instead, they’ll launch their own chains—likely as Layer2s on Ethereum. In such a world, composability and interconnected TVL matter. Solana struggles to compete in that environment. Network effects lock in value: just because a chain’s native token rises doesn’t mean its DeFi ecosystem will follow. Recently, USDT consolidated issuance across chains, moving many L1 versions back to Ethereum mainnet—for security reasons. This shows that trust and safety outweigh raw performance. Even if newer L2s offer better UX, they can’t easily displace Ethereum’s entrenched position—especially since many Ethereum L2s already match or exceed new L1s in performance.
Advantages of the MOVE Language
Alex: Got it. Now, we’re seeing several public chains using the MOVE language—even EVM-compatible Move L2s like Movement, which recently listed on Binance. Proponents claim MOVE offers stronger security guarantees for DeFi and financial applications compared to Solidity. As a builder and entrepreneur, do you find this advantage compelling enough to switch?
Mindao: We’ve looked at these ecosystems—including Solana, which uses Rust. Many argue Rust is more expressive and safer than Solidity. Beyond MOVE, other chains like Tezos have introduced custom languages touting formal verification. Yet most of these new languages fade quickly. The issue isn’t necessarily architectural superiority. For developers, timing matters most. Solidity has decades of battle-tested experience—its pitfalls have been identified and fixed through real-world failures. Today, it’s backed by vast tooling, auditing tools, frameworks, and a large community of experts. Need a security audit? Thousands of auditors know Solidity. For MOVE or Solana, maybe hundreds. Security isn’t inherent to a language—it emerges from usage, scrutiny, and ecosystem depth. A new language faces a chicken-and-egg problem: without adoption, it can’t build credibility; without credibility, it won’t gain adoption. Like trying to light wet wood—it never reaches ignition. Without enough case studies, audits, or exploits analyzed, you can’t validate its safety claims. So I don’t believe in absolute language superiority. Once a language achieves network effects, it becomes nearly impossible to displace. That’s why we’re seeing projects like Monad take Solana’s high-performance engine and make it EVM-compatible. The trend isn’t “replace EVM”—it’s “bring better performance to the existing ecosystem.” Many new infra projects follow this path: adopt EVM compatibility or build new chains with familiar execution environments. That’s the dominant direction now.
Impact of U.S. Political Shifts on Crypto
Alex: Yes, Monad and Movement seem aligned with that vision. This year brought major policy changes: Trump won the presidency, and Republicans gained control of both congressional chambers. Sentiment around crypto regulation in the U.S. appears vastly improved. Recently, the Fifth Circuit Court ruled that OFAC’s sanctions on Tornado Cash were unlawful. How do you assess the impact of this political shift on DeFi and the broader crypto space? What are the optimistic aspects, and what risks remain?
Mindao: On the upside, it’s exceeded even my most optimistic expectations. I didn’t expect it to be this strong—Trump’s pro-crypto stance, his kids launching DeFi projects. His inner circle is now deeply influenced by crypto: Donald Trump Jr. runs a DeFi project; Baron, another son, is involved in DeFi and NFTs. Plus figures like J.D. Vance and David Sacks—both PayPal Mafia alumni—are embedded in his administration. Essentially, everyone around Trump on crypto issues is pro-crypto. Politically, it’s more favorable than I imagined—possibly *too* favorable. That’s what worries me. Could Bitcoin be added to U.S. reserves? Optimistically, this cycle might break the traditional four-year crypto cycle. Legally, we may finally get a dedicated crypto regulatory framework—instead of forcing crypto into outdated securities laws via the SEC. An independent regulatory regime would be transformative—not just for DeFi, but for all of Web3. On the downside, crypto has clearly become a partisan issue. It’s no longer neutral—it’s a Republican vs. Democrat divide. If Democrats regain power in four years—or even sooner, during the 2026 midterms—will they reverse these policies? This politicization makes crypto vulnerable to pendulum swings. It’s now a core battleground between the two parties.
Alex: True. Even before 2028, the 2026 midterms could challenge Republican control of Congress.
Mindao: Exactly. But here’s a silver lining: the crypto lobby’s influence is now undeniable. Ripple-backed political action committees achieved an 85% success rate in supporting pro-crypto Senate candidates—an astonishing win rate. This signals that anti-crypto politicians may struggle to gain legislative footholds. However, this dominance could provoke backlash from Democrats or anti-crypto factions. They may organize counter-efforts.
Alex: Yes, Fair Shake is already fundraising tens of millions for the 2026 midterms.
Mindao: Right. The positive takeaway is that crypto advocacy has penetrated both executive and legislative branches deeply.
Bitcoin’s Path to National Treasury Adoption
Alex: One of the most watched narratives this cycle is Bitcoin entering national treasuries. It’s not just federal—states are introducing Bitcoin reserve bills. Pennsylvania and California, for example, have submitted legislation at the house level. Do you think it’s likely this will pass at the national level within the next four years?
Mindao: Federal adoption may still face hurdles. State-level adoption is more feasible due to smaller fiscal scope. Nationally, resistance remains strong. While Bitcoin is often called “digital gold,” many still see it as a non-sovereign currency—a direct challenge to fiat debasement. Fundamentally, this conflicts with the U.S. dollar’s role as the world’s primary reserve currency. Many in Washington recognize this tension: Bitcoin competes not just with gold, but ultimately with the dollar. Indeed, its value grows precisely because fiat currencies lose purchasing power. So yes, there’s significant opposition. Whether Trump pushes hard enough depends on his political will. Based on his style, he might push aggressively. But presidential support alone isn’t enough—it needs legislative approval.
Alex: I agree. Many sanctioned nations—Russia, Iran—are exploring Bitcoin as a reserve asset, explicitly positioning it against the dollar. Using Bitcoin as a reserve directly challenges the dollar’s dominance.
Mindao: Precisely. Calling Bitcoin “digital gold” is a clever framing—it positions it as competing with gold first ($13–15 trillion market), not the dollar. No one openly says “we’re replacing the dollar.” But underneath, it’s the same game. Digital gold that’s infinitely divisible—isn’t that just money? The crypto community avoids highlighting this, but Wall Street and the Treasury aren’t fooled. They understand the implications.
Big Companies Investing in DeFi Projects
Alex: Let’s zoom back into DeFi. We now have Bitcoin ETFs, Ethereum ETFs. Public companies and even government treasuries holding BTC is no longer surprising. Will traditional financial institutions start acquiring or investing in blue-chip DeFi projects—like Aave or Uniswap—as strategic assets? Could this happen within the next 1–2 years?
Mindao: Fascinating question. Currently, Bitcoin ETFs treat crypto as just another tradable asset—like digital gold. It’s siloed from traditional finance: part of AUM, offered to clients, but disconnected from the firm’s core operations. BlackRock offers Bitcoin ETFs, but that doesn’t change how BlackRock operates. But this cycle shows intriguing shifts. Take MicroStrategy: once a software company, now effectively a financial entity centered on Bitcoin. Unlike ETFs, MicroStrategy and Bitcoin have a symbiotic relationship—what I call a “twin-token mechanism.” Bitcoin’s price volatility affects MicroStrategy’s stock, and vice versa. This creates feedback loops—something we usually see in DeFi with dual-token economies. Now imagine a similar link between a DeFi protocol and a public company. Suppose a DeFi lending platform controls a publicly traded bank. That bank could bridge fiat to DeFi—issuing loans, managing deposits, integrating compliance. Or a public exchange routing fiat directly into on-chain DeFi. That’s the real opportunity: not BlackRock buying Aave tokens, but creating twin economic systems where DeFi profits flow to shareholders, and corporate balance sheets amplify DeFi growth. I predict such models will emerge in the next 3–5 years—especially under a pro-crypto administration. Think of Trump’s World Liberty Financial launching World Liberty DeFi—could they issue a stablecoin, obtain a banking license, and list it as a public company? Entirely possible. This fusion—“public company first, DeFi second”—could redefine how capital flows between TradFi and DeFi. Your DeFi generates revenue, shareholders benefit; your public company raises capital, which fuels DeFi expansion. That’s the exciting frontier: aligning “stocks” and “tokens” economically.
Alex: That’s a completely fresh perspective—never heard anything like it. First, stock-BTC twins like MicroStrategy; now, DeFi-powered public companies. Very imaginative. But going back to big financial firms: do you think they’ll build their own DeFi applications—say, a better version of Aave? Could firms like BlackRock or JPMorgan launch such services?
Mindao: We already see traditional banks experimenting—JPMorgan has its own internal blockchain, mainly for cross-border settlements. Their model resembles Curve or Uniswap pools—just not connected to public chains. That’s likely phase one: internal clearing. Phase two? Connecting to public infrastructure. This brings us back to the L1 vs. multi-layer debate: how will enterprises engage with blockchains? If they want control, they’ll launch their own Layer2 or Layer3, then connect cautiously to public networks. Their entry into DeFi won’t be permissionless—it’ll be permissioned. Think Coinbase or Kraken, but even more conservative. Coinbase, though crypto-native, is far more cautious than Binance. Binance launched BSC with aggressive DeFi experiments; Coinbase rarely launches its own protocols. Future entrants will likely mirror Coinbase/Kraken: deploy a private or semi-private Layer2, integrate DeFi components, but add strict access controls, whitelists, KYC. They’ll probably reuse open-source code like Uniswap’s—but wrap it in compliant logic. That’s the most plausible path.
Alex: Understood. Both Coinbase and Kraken chose OP Stack, joining the Superchain ecosystem. Does that suggest large institutions are more likely to build within Ethereum’s expansive ecosystem?
Mindao: Absolutely. Current and future Ethereum Layer2 performance is more than sufficient for institutional needs. More importantly, OP and Arbitrum are pursuing different strategies. OP is building Superchain—an interconnected network of L2s aiming to unify liquidity across chains via interop. Solving cross-L2 fragmentation will create powerful network effects: more participants, denser liquidity, stronger incentives to stay. Once this mesh forms, leaving becomes costly. That’s why I’m not worried about Coinbase spinning off its own L1. As long as interoperability and shared liquidity exist, standalone chains risk becoming isolated islands—with less value than participating in the broader ecosystem.
Notable Projects and Evaluation Criteria
Alex: That’s one of the most insightful takes I’ve heard on Ethereum’s moat versus Solana. You also mentioned new products this cycle. Over the past year, which projects stood out—either new entrants or established ones evolving?
Mindao: Two come to mind: Pendle and Ethena. Pendle’s journey was rocky. Initially, they launched fixed-rate yield products with maturity dates. As someone from traditional finance, I was skeptical—anything with expiration dates tends to fail in DeFi. Most expiry-based options or futures products never gained traction. So I ignored Pendle initially. But with the rise of LSD and restaking protocols, they found a niche. They attracted two groups: yield-focused whales who dislike speculation, and retail users chasing U-tokens for short-term gains. Bridging these markets was brilliant. Is this the final form? Probably not. Eventually, we may see perpetual yield products—like perpetual contracts—where positions don’t expire and need rolling. Pendle may be exploring this. Either way, they’ve achieved product-market fit in this cycle. Ethena, meanwhile, took a common trading strategy—basis arbitrage—and made it accessible to everyone. Now managing $5 billion in exposure, they’ve perfected yield tokenization. Their design, accessibility, and distribution are unmatched. Since their launch, even major exchanges have followed: Binance rolled out FDUSD, and lending rates on Binance and OKX now mirror Ethena’s yield benchmark. Everyone’s copying them. These two projects truly innovated this cycle. Another trend: RWA on-chain. Unlike DeFi Summer—driven by subsidies and fake yields—this cycle delivers real yield. MakerDAO, for instance, now earns most of its income from U.S. Treasuries. Is this “DeFi”? By old definitions, no—it’s De-CeFi. Ethena’s positions are on centralized exchanges; Maker’s Treasuries are held in off-chain trusts. Highly centralized. But this hybrid model solves real problems: sustainable yield from real sources—Treasury returns, leveraged basis trades—distributed via DeFi. The evolution from ideological purity to pragmatic hybridization is a defining feature of this cycle. One more trend: applications thriving without tokens. Polymarket and Pump.fun generate strong revenue despite having no token. What does this mean? It shows that robust infrastructure enables valuable, tokenless apps. Polymarket runs on Polygon, Pump.fun on Solana—both rely on high-performance chains. As L2s improve, we’ll see more such apps: no tokens needed, yet delivering immense utility. Trading bots are another example—some earn $1–2 million per week without issuing tokens. This breaks the old rule: “no token, no launch.” Now, value creation doesn’t require tokenization. That’s a fundamental shift.
Alex: As an investor, what dimensions do you prioritize when evaluating a DeFi project? What constitutes a lasting moat in DeFi?
Mindao: Depends on investment horizon. For short-term (1–2 years), narrative-driven plays dominate—betting on trending mechanisms. But I focus on long-term, cross-cycle survival. Previously, I thought strong communities were essential. Now, I see otherwise. Top-valued, high-moat projects like Uniswap ($10B+ market cap) don’t rely on vibrant communities. Aave has some community engagement; Maker too. But the real moats are twofold: continuous innovation and brand strength. Anyone can fork Uniswap—V1, V2, V3—but none capture its value. I’d estimate 60–70% of Uniswap’s valuation comes from brand alone—something un-forkable. Same for Aave and Maker. Brand strength stems from two things: consistent innovation and security. Aave didn’t pioneer pool lending, but kept iterating since 2019. Compound stopped innovating after DAO transition. Second, security: Uniswap has never been hacked. Compound and Maker suffered breaches but recovered. Resilience builds trust. Over time, these factors compound—brand equity grows with each cycle. That’s the ultimate moat. And we’re seeing rising concentration among top-branded projects.
Investment Principles for DeFi Projects
Alex: In your personal portfolio, beyond BTC and ETH—blue-chip holdings—do you include leading DeFi projects in your long-term allocation?
Mindao: Generally, no. Since we’re actively building in DeFi, I don’t double down via token investments. My exposure is already high through time and effort. I lean more toward allocating to foundational layers—public chains.
Alex: Understood. But for a typical Web3 investor—someone holding BTC, ETH, and some L1 tokens—should DeFi projects be part of their portfolio?
Mindao: Portfolio construction is crucial. When I entered crypto in 2013, I allocated 30% of my portfolio to speculative, non-Bitcoin projects. I invested in Ethereum’s ICO in 2014, plus several others. ICOs were rare then—only a few per year—I tried to back most. For retail investors, diversification is key. Don’t go all-in on Bitcoin and Ethereum. Especially if you’re trying to “flip” your life, not just double your money. Going 100% into altcoins is risky—I know people who lost everything. But if you have strong earning power and treat losses as acceptable, then 100% degen bets—even meme coins—aren’t irrational. For balanced portfolios, I recommend reserving at least 30% for alternatives. Within that, DeFi is arguably the best category for value capture. Where else in crypto do you find real yield, real income? Only DeFi delivers sustainable cashflows today. So if you exclude blue-chips and focus on alts, DeFi should dominate—maybe 50% or more. The rest can go to degens, memes, or other speculative sectors.
Alex: Thank you so much, Mindao, for this deep and wide-ranging discussion. We look forward to having you back to share more insights on DeFi and crypto. Appreciate your time.
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