DeFi 2.0: Security, Institutions and the Next Wave

DeFi 2.0: security, institutions and the next wave

Overview

What does the new wave of decentralized finance look like? In this MERGE Madrid panel, Kiln, dYdX, Radix, Lace and a DeFi robo-advisor on Solana debate so-called “DeFi 2.0”: the lessons of the previous wave, security and user experience, the arrival of institutions, staking and yields, the balance between decentralization and mass adoption, and the role of AI.

What you'll learn

• Lessons from the previous wave: scalability, developer experience and UX
• Security: modular security, biometrics and self-controlled identity
• Onboarding: account abstraction and progressive learning
• Institutions: staking, stablecoin vaults and more sober yields
• Decentralization vs adoption: why they can coexist
• The future: AI, RWAs, distribution and “DeFi becoming finance”

Session summary

Lessons and design: Radix explains that the new wave requires scalability, a strong developer experience and a UX that both end users and institutions can trust, with primitives (identity, regulation) built into the protocol itself.

Security and wallets: Lace addresses modular security, biometrics and a user-controlled identity (consent and KYC), as well as onboarding with account abstraction and progressive learning that avoids technical jargon.

Product decentralization: dYdX describes its migration to its own chain for a decentralized order book of perpetual derivatives, with a clearer identity and value proposition versus centralized exchanges.

Institutions and yields: Kiln explains how staking and stablecoin vaults attract institutions with more moderate yields (cited at around 4-8%, according to the talk) and compliance frameworks, versus the extreme yields of the past.

Decentralization vs adoption: the panel agrees decentralization and compliance can coexist: there will be more “centralized”, non-custodial front-ends for the general public and, at the same time, direct on-chain access for those who prefer it, with intermediaries required to add value.

The future: the expansion of stablecoins, distribution via fintechs and exchanges, the tokenization of more assets (RWAs) and AI (agents that put money “to work”) are mentioned as drivers of the next phase; a DeFi robo-advisor on Solana exemplifies the “deposit and forget” approach adapted to risk profile.

Watch the full talk

Watch the full recording on MERGE's YouTube channel, with Kiln, dYdX, Radix and Lace on DeFi 2.0.

FAQs

What is DeFi 2.0?
According to the talk, the new stage of decentralized finance, safer, more usable and with greater institutional participation than the 2020-2021 wave.

Can decentralization and compliance coexist?
According to the panel, yes: users choose between simple, non-custodial front-ends or direct on-chain access with self-custody.

What yields do institutions seek now?
According to the talk, more moderate yields (around 4-8%) in stablecoin vaults with compliance frameworks, versus the extreme yields of the past.

Is this investment advice?
No. This content is informational and summarizes what was presented in the panel; it does not constitute investment advice. DeFi carries risks; consult a professional.