DeFi Paradigm Shift: From Retail to Institutional-Grade Finance and Asset Tokenization

The main shift in DeFi, which started to become apparent in 2023 but was initially hindered by strict legislation, is now fundamentally changing the very paradigm of DeFi. It is no longer about unbanked people accessing financial services, but rather about the banked gaining access to on-chain liquidity provided by the world's major financial institutions. While small farmers in Cameroon lack liquidity, large Wall Street firms, pension funds, and hedge funds possess abundant resources. Consequently, DeFi today is no longer centered around astronomical interest rates or novelty ideas, but about allocators, custodians, providers, solvency, institutional frameworks, SDKs, and compliance—aimed at serving institutional-grade finance. Projects like Elixir, Mellow, or Stable are designed for the institutional sphere, excluding retail investors. The current trend involves tokenizing everything that can be tokenized—from stablecoin wrappers, staking derivatives, to tokenized commodities, stocks, and real estate. This emphasis on Real-World Assets (RWA) is shifting the narrative from technological innovation to bridging traditional finance with blockchain assets. Although institutionalization demands legal frameworks including KYC, there remains a demand among privacy-conscious users for trading tools that do not expose their identities, fueling counter-trends such as perpetual DEXs, exemplified by Hyperliquid, which navigates between regulatory scrutiny and growth. For DeFi participants looking for liquidity and yield, there are opportunities in low-risk options like BTC and ETH deposits via platforms such as Katana, Ethereal, Etherfi, or Mellow, often complemented by strategies involving stablecoins and derivatives. Trading pairs and opportunities with high APRs are available, but risk management and diversification remain key. Overall, DeFi is about managing risk and diversifying investments rather than seeking quick, astronomical returns—emphasizing cautious, strategic participation.