The Eulogy of DeFi

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As I drove my two daughters to school this morning, my thoughts drifted to a SEC filing that took place on Monday — a filing that marked a pivotal moment in the history of finance. This wasn’t just another regulatory action; it was a direct response to the integration of smart contracts into traditional finance, a turning point that set a legal precedent. As I reflected on its implications, a realization hit me:


DeFi is officially dead in the United States.


That filing established a framework where all subsequent smart contracts holding crypto, if built within the U.S. or controlled by U.S. citizens, would now fall under the purview of the SEC as a pooled investment fund. The pieces started coming together, and I could see the broader ramifications unfolding.


The Wild West had been won, and DeFi, as we knew it, had met its end.


In my mind, I saw its eulogy being written out:


“We gather here today not only to mourn but to reflect on the brief yet profound legacy of Decentralized Finance — DeFi, as it was widely known. Born from the ideals of transparency, autonomy, and financial inclusion, DeFi emerged in the wake of the 2015 Ethereum revolution as a disruptive force, daring to challenge the entrenched structures of traditional finance.


At its height, DeFi promised a future free from intermediaries, oversight, and investor protections — a world where financial transactions were trustless, borderless, and dictated by immutable code rather than institutional authority. It rapidly redefined lending, borrowing, trading, and even insurance, embodying the spirit of permissionless innovation.

Yet, like many revolutionary movements, DeFi burned bright and moved too fast, facing regulatory challenges and ultimately collapsing under the weight of its own ambition.

On February 11, 2025, at 17:33, DeFi met its untimely end in the United States. In a bitter and ironic twist, its downfall was not due to its own excesses or vulnerabilities but rather to the forces it sought to displace. The first known case where an SEC filing was triggered by the inclusion of a traditional finance smart contract marked the moment DeFi was not only challenged but absorbed and overtaken by its institutional counterpart.

DeFi is survived by its elder sibling, TradFi, which has now integrated many of its innovations — though under the rigid structures of regulation and control. The very institutions DeFi sought to make obsolete now wield its tools, repurposing decentralized technology to define the financial system for everyone.


To some, this is a tale of inevitability — a reminder that no revolution is immune to assimilation. To others, it is merely another chapter in the relentless evolution of financial systems. But let us not forget what DeFi represented. Its ideals laid the foundation for a safer, more transparent financial future. Its influence persists in the immutable ledgers of blockchain networks, now carried forward by the very institutions it once sought to displace.”

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