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Opinion of: Robin Nordnes, co-founder and CEO of Raiku
Many decentralized finance (DeFi) the diehards assume that the future of institutional adoption will be driven by bright, high returns. The reality is that the mainstream will be more impressed with consistency and trust.
DeFi has opened the door for ordinary people to access financial instruments that were previously reserved for institutions. For the first time, anyone could invest their money in open markets from anywhere in the world. It was a big step forward. The same openness that made this possible came with a trade-off. Decentralization gave us freedom, but sometimes it meant unpredictability.
Now is the time to close this gap. The next chapter of DeFi is about building systems that are as consistent as the applications we use every day. When crypto becomes as reliable as Web2, it will invite entire industries to join the chain. That’s what we need if we’re really going to onboard the next billion users.
The illusion of performance
DeFi has always thrived on performance. It was the hook that pulled millions in. The idea that your assets could earn while you slept was powerful, and it worked. Performance only matters, however, when the underlying foundation is firm. If the execution is unpredictable, the numbers on the screen are just an illusion.
Retail investors may ignore this, but the world we try to board is not. Institutions, funds and companies care about accuracy, and will not build on shaky ground. The final piece of the puzzle is making crypto apps that are consistent and predictable like the Web2 apps we trust and use every day.
In 2020, the massive adoption of DeFi has been expected to occur between 2023 and 2025.
Now that 2025 is almost over, it’s pretty clear that we’re only marginally closer to that goal now than we were then. As crypto gradually becomes more important in the wider financial sphere, we need to properly recognize the risks that institutions are aware of.
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Yes, DeFi has grown, and performance is catching the attention of investors every day. We cannot expect institutions to board with the promise of 5% performance that comes with the risk of system collapse.
As decentralized markets evolve and strive to become institutional quality systems, reliability, predictability and determinism are what will define the next wave of DeFi.
What brings DeFi back
Let’s take a look at Solana. Currently, it is already fast, consistent and continuously improved. Most users rarely see problems. When you start operating at the scale of institutions, however, running automated settlement strategies or processing thousands of transactions per minute, “almost” isn’t good enough. For a hedge fund or an exchange, a single failed transaction can throw off an entire day of reporting or change the risk into millions of dollars.
Retail users already trust Solana. Institutions are next in line. They need certainty. They need to know that when they press “run,” it will happen instantly and exactly as planned.
Reliability is the new alpha
Reliability is what transforms crypto from an experiment into an economy, and institutions will not be encouraged without it. Of course, institutional investors care about 5%, 10% or even 20% APY, but they also care more than 100% reliability.
Funds, exchanges and banks can manage billions of assets and must answer to clients, governments and the global financial industry if something goes wrong. Why risk your reputation on systems that have proven to be fallible? Institutions considering DeFi rails need accuracy, execution guarantees and predictable latency. Speculative returns aren’t that important when you’re trying to bring a sizable chunk of the world’s GDP into the chain.
The shift towards determinism
More than we need speed, we need certainty. Deterministic execution means knowing exactly when your transaction will be processed and how it will behave once it is complete. It levels the playing field and gives everyone, from traders to institutions, the same kind of confidence they expect from traditional systems.
The missing piece for large-scale DeFi adoption is not more speculative incentives for hopeful pockets, but rather reliability that keeps under stress. When networks can guarantee inclusion and accuracy, and when validators are rewarded for activity time rather than speculation,
DeFi stops being a bet and starts becoming infrastructure.
From performance wars to infrastructure wars
DeFi moves in cycles. First came yield farming, then scale, then protocol liquidity and now real world assets. Each wave brought innovation and capital. None of this fully opened the door for institutions. The next cycle will be.
The new era for DeFi will not be about chasing APY, but rather about who can deliver predictable results at the speed of the Internet. The winners will be those who make DeFi feel boring in the best way: stable, fast and accurate.
Opinion of: Robin Nordnes, co-founder and CEO of Raiku.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts and opinions expressed herein are solely those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.
