The Evolution of Sustainable DeFi - Brad Harrison, Venus Labs

DeFi has evolved from basic lending/borrowing/swapping to include more sophisticated products like tokenized real-world assets (RWA), insurance, and bonds

Current DeFi market valuation is around $56 billion, with lending/borrowing being the largest category showing strong product-market fit

Major challenges in DeFi 1.0 included poor user experience, over-reliance on inflationary token rewards, and sustainability issues

“Real yield” has emerged as a key narrative, focusing on sustainable revenue generation rather than inflationary token emissions

Security and auditing have become critical priorities, with protocols now being ranked based on security scores

Tokenized US Treasuries have seen significant growth, going from $1B to $3B in six months, showing increasing institutional acceptance

Lido dominates the liquid staking market with ~38B TVL, raising centralization concerns with 30% market share

Venus protocol introduced user loyalty rewards program requiring 90-day token lock-up to create sustainable user incentives

DeFi adoption is growing particularly strong in countries like El Salvador and Argentina, where it’s becoming part of everyday financial infrastructure

Projects focused on real-world asset (RWA) tokenization, particularly in equities and real estate, represent a major growth trend in DeFi