With the right tools, Solana can be the incubator for defi 2.0

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The eyes of the world are on the trial of FTX founder and former crypto poster-child Sam Bankman-Fried, who has morphed into a symbol of the worst excesses of the last crypto bubble. But the media circus that surrounds proceedings is more true-crime series than legitimate commentary on decentralized finance.

It is true that defi has been on a roller coaster over the past several years. The sector exploded onto the financial and technological scene in 2021 as groundbreaking new tools allowed people to put their money to work and earn yield in unprecedented ways through participation in networks such as MakerDAO and Aave.

Despite the seeming suddenness of its arrival, this breakthrough was a long time coming. For decades, if not centuries, traditional financial markets and instruments have sold investors short in two important ways.

The first relates to access: since traditional markets are overseen by centralized gatekeepers such as banks and mutual funds, they have historically excluded huge swathes of the world’s population, particularly outside the wealthy countries that host the bulk of big institutions. The second limitation was technological. In a digital age, markets have remained largely analog.

Defi introduced innovations that opened the door to financial products that simply weren’t possible before. This turned out to be both a blessing and a curse: the combination of novelty and popularity led to a proliferation of defi products—not all of which worked as advertised. Many projects promised investors far more than they could deliver. And as the FTX-Alameda saga demonstrates, some strayed into outright fraud.

The enormous increase in activity, meanwhile, severely strained the capacity of Ethereum, which with its smart contract functionality, made many of these early innovations possible. Couple all that with the macroeconomic-driven descent into a bear market in 2022, a

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