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2026-08-05 01:26:20

Ground COO says DeFi is losing its way in a subsidy-driven yield race

Ground COO Stephanie Vaughan argued that DeFi is drifting into a “yield war” centered on access to fintech distribution rather than solving end-user problems. In her view, companies such as Robinhood, Coinbase, Revolut, and Kraken are competing for customer funds, while protocols including Aave, Morpho, and Ethena are trying to become the infrastructure layer for lending strategies. Vault providers and risk management firms, she said, are also competing around fintech platforms rather than building direct user relationships for DeFi itself. Vaughan said this setup sends a clear market signal: pricing power for DeFi products is nearing zero. She argued that much of the yield on offer comes from subsidies provided by platforms, vault services, strategy providers, or underlying protocols, instead of real demand created by the product itself. She described that dynamic as closer to paying “shelf fees” than gaining genuine distribution. She also pointed to weaknesses in some multi-strategy vaults, including idle capital, waiting periods before deployment, and slow governance processes, which can leave actual user returns below advertised APY. By contrast, she said, traditional financial products such as money market funds can put capital to work immediately. As L2 costs fall and cross-chain infrastructure matures, Vaughan said the chain itself is no longer the main competitive edge, and future DeFi products should be built around user needs and move toward infrastructure such as MPC wallets that let users keep control over strategy while platforms handle execution and simplification.

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Ground COO says DeFi is losing its way in a subsidy-driven yield race