Jon Ren
In recent years, we’ve witnessed the explosive growth of decentralized finance (DeFi). From early ideas around permissionless lending and borrowing, the industry has evolved into a complex ecosystem with total value locked (TVL) reaching hundreds of billions of dollars. However, behind the impressive numbers, C-level executives from traditional enterprises still harbor doubts. They see market chaos, collapses like FTX and Luna, and “crypto bros” boasting unrealistic profits.
This is the paradox of today’s DeFi: on one hand, it promises a revolution in capital efficiency and asset liquidity; on the other hand, it remains surrounded by hype, speculation, and risk. The question is no longer whether DeFi will survive — but which form of DeFi will endure and thrive, especially as we approach a potential bear market scenario in 2026. Will it continue as a digital casino, or evolve into a robust foundation for global finance? This is a strategic question every enterprise leader must seriously consider.
At Cyberk, we believe this divergence creates a critical decision point for builders and investors alike.
The crypto market has always been cyclical — boom and bust. If we assume 2026 becomes another bear market, it will not only be a challenge but a necessary cleansing. During bull phases, DeFi protocols easily attract TVL and users with sky-high APYs, often paid in inflationary tokens. But when liquidity reverses, these models quickly reveal structural weaknesses and collapse, resulting in a severe loss of trust from users and investors.
The Dilemma: DeFi protocols now stand at a crossroads: continue the “bubble growth” model fueled by short-term yields, or transform themselves into sustainable systems with real value creation, resilience to bear markets, and the capacity to attract institutional capital. For enterprises exploring blockchain development, understanding this difference is essential to avoid becoming “The Greater Fool” in a fundamentally flawed project.
To analyze the two potential paths, we need a clear evaluation framework prioritizing business value and long-term sustainability rather than short-term market metrics.
Financial Sustainability: Ability to generate real revenue and profit without relying on endless token emissions.
Risk Management & Security: Strength of protocol security, defense against exploits, and robust liquidity risk controls — critical for institutional adoption.
Real-World Utility: Ability to solve actual business problems and integrate with real-world assets (RWA) or decentralized infrastructure (DePIN), instead of just enabling internal financial operations.
Regulatory Alignment: Potential to comply with existing and future regulations — a key requirement for institutional capital flows.
User Experience (UX): Simplicity and usability, reducing technical barriers for mainstream and enterprise users.
Let’s examine two “candidates” representing opposite philosophies in DeFi development:
Philosophy: Maximize short-term APY, using token emissions as the primary mechanism to attract and retain liquidity.
Strengths:
Fatal Weaknesses:
Use Case Fit: Short-term speculation for retail traders, not suitable for enterprise strategies.
Philosophy: Build foundational infrastructure that creates real value, solving concrete business problems and integrating with real-world assets and systems.
Strengths:
Weaknesses:
Use Case Fit: RWA tokenization, supply chain finance, DePIN infrastructure, collateralized lending, and cross-border enterprise payments.
| Evaluation Criteria | Speculation & Yield-Chasing Model | Utility-First & Real-World Integrated Model |
|---|---|---|
| Financial Sustainability | Low (needs constant token emissions) | High (revenue from real services and utility) |
| Risk & Security | Low (fast, insecure, liquidity risks) | High (audits, governance, risk controls) |
| Real-World Utility | Very low | Very high |
| Regulatory Alignment | Low | High |
| User Experience | Complex, high risk | Improving, business-friendly |
Insight: A bear market is not the death of DeFi — it is the ultimate stress test. It crushes hype-driven projects and rewards those with real economic foundations. For enterprise leaders, this is a chance to separate “grain from chaff,” identifying sustainable DeFi solutions for long-term integration.
There is no universally “best” technology — only the technology that best fits your strategic goals.
→ You should prioritize the Utility-First & Real-World Integrated DeFi Model.
Focus on projects with strong partnerships, regulatory alignment, and real business use cases.
→ The speculative model may suit you — but it is absolutely not suitable for enterprises accountable to shareholders or long-term strategy.
The great migration of global finance into blockchain is not a temporary trend — it is an inevitable evolution. If a bear market arrives, it will not be an enemy, but a teacher, forcing the industry to focus on real value.
Enterprise leaders should not let fear of a “Nokia Moment” paralyze them. Instead, view the bear market as a strategic opportunity to invest in strong foundations — in DeFi protocols that deliver true utility and integrate seamlessly with the traditional world.
Smart decisions today won’t just save you from thousands of hours of technical debt tomorrow — they will position your organization as a frontrunner in the Web3 financial era.
For teams ready to build that future, Cyberk is here to be the architect of your Web3 strategy, ensuring your infrastructure is secure, scalable, and ready for the real world.
Cyberk explores how Kohaku SDK framework brings default privacy and ZK security to every wallet.
At Cyberk, we’ve been closely monitoring yield markets for DeFi build & investments.