2026-01-20 01:22:25

The issues with DeFi 1.0 are right there—complete transparency means strategies are easily seen through, large investors are quickly exploited, and institutions simply don't dare to touch it. Regulatory compliance acts as a barrier, effectively blocking trillions in capital from entering.

Looking at it from a different perspective, "compliant privacy" is the true path for DeFi 2.0. Can a lending protocol verify your credit score without revealing personal information? Can an AMM prevent large trades from being front-run? Now we're starting to see some real potential.

Once these applications mature, significant traditional financial capital will have a reason to enter. Hundreds of billions of dollars in capital inflows, combined with more complex and sophisticated financial product designs, will thoroughly unlock the imagination space of DeFi. Such technological infrastructure is the key for the next generation of institutionalized and professionalized DeFi.

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GateUser-9ad11037

· 8h ago

The logic of compliance and privacy sounds good, but how many projects can truly be implemented? Most are just talk. --- Trillions of capital? First solve the MEV problem before bragging. --- It sounds nice, but in reality, institutions are still afraid of risks. Privacy ≠ compliance, equating the two will eventually backfire. --- DeFi 2.0 has been talked about for so long, but we're still just dreaming. Let's talk when there are real use cases. --- Transparency is actually what I like. Who will supervise privacy? --- This idea is interesting, but who will guarantee the security of the privacy protocols themselves? --- Traditional finance entering the space? Uh, they don't really want to, they just want to harvest the profits. --- Lending + privacy verification, this can indeed attract institutions. But how long until the technology matures? --- It's just another cyclical hype, wait until someone actually uses it before discussing. --- Good idea, but what about scalability? These are still just pseudo-questions.

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NotFinancialAdviser

· 8h ago

In simple terms, we need to first tackle the issues of MEV and front-running transactions, otherwise no matter how much money is invested, it will just be exploited for profit. Privacy compliance sounds great in theory, but who dares to actually implement it? Trust issues must be resolved first. Traditional finance requires not only privacy but also risk control, clearing, and default mechanisms. Currently, DeFi hasn't fully figured these out. Institutions can only start bottoming out when liquidity is deep enough and liquidation costs are low. Otherwise, they still have to rely on CeFi for reliability. If this path is correct... it could indeed be the trigger for the next big bull market. Wait, could it turn into a new round of centralized power? Who will handle privacy verification? It's basically copying traditional finance but under the guise of decentralization. The vibe feels off. It sounds good in theory, but what about the specific implementation? Even basic privacy programming isn't mature yet.

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Layer2Observer

· 8h ago

Hmm, this idea is interesting, but one point needs clarification—can privacy and transparency truly be reconciled? From the source code perspective, zero-knowledge proof solutions are still trading off between cost and performance, and there aren't many examples of monthly active users running smoothly. From an engineering standpoint, MEV protection for block trades is indeed a real issue, but the term "compliant privacy" sounds a bit like overhyped marketing. Institutions are hesitant to get involved mainly due to regulatory uncertainty, not purely technical issues. The description of trillions in capital inflows... let's look at the data. What is the real progress of traditional financial institutions entering DeFi? A more cautious attitude is needed.

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ExpectationFarmer

· 8h ago

Well... to put it simply, it's a balance between transparency and privacy. Currently, DeFi is too exposed, with large holders' operations fully visible. No wonder institutions keep their distance. I agree with the logic of compliant privacy, but the question is, who defines "compliance"? Not all countries have the same standards. If on-chain credit verification can truly be achieved without exposing identities, that would indeed be a major breakthrough... but implementing the technology is much more difficult than just talking about it. The entry of traditional capital is definitely a good thing, but I'm also worried that what gets introduced isn't just money, but a new round of methods to harvest retail investors.

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liquidation_watcher

· 8h ago

Yeah, you're right. Compliance and privacy are really the bottlenecks for institutional entry. Otherwise, large funds would be directly eaten by MEV, who would dare to play? Institutions are really waiting for something like this. The balance between transparency and privacy—once achieved—could be a trillion-dollar opportunity. The prerequisite is that this technology doesn't collapse again. We've seen too many promises already... Compliance and privacy sound good, but will the implementation just be another concept hype? We'll see. But the logic is indeed sound. DeFi needs privacy protections to truly become institutionalized. Right now, full transparency isn't suitable for large-scale funds.

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MEVHunterWang

· 8h ago

In simple terms, these DeFi projects are still too transparent, and institutions get scared at first glance. Privacy + compliance is the real gold mine; whoever gets the key first wins. Once this becomes mature, traditional capital will truly flood in. Just thinking about it is exciting, but current solutions are still unreliable. Compliance and privacy sound great, but how to implement them? That’s the real challenge. AMM anti-sniping? Someone has been working on it for a while, but it's still half-baked. Real DeFi 2.0 is nowhere in sight; don’t be too optimistic. Right now, it’s still a playground for small retail investors; when institutions come in, it might not be as good. This logic makes sense, but who has truly solved it? Trillions in capital sound great, but can they pass the actual regulatory hurdles?

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