In the crypto industry, the emphasis on decentralization has often eclipsed the practical needs of traders. This has resulted in a system that favors ideology over functionality, driving serious traders toward centralized finance (TradFi). To effectively compete with TradFi, decentralized finance (DeFi) must enhance its performance.
This is where the concept of Minimum Viable Decentralization (MVD) comes into play. MVD seeks to strike a balance between maintaining decentralization and providing the speed and reliability that traders demand. While TradFi has adapted to cater to high-frequency trading, DeFi faces challenges such as slow transaction speeds and inconsistent execution.
For DeFi to attract serious traders, it must implement technical standards that guarantee rapid execution and high availability. MVD suggests that protocols can uphold essential decentralization while also optimizing for performance. As DeFi continues to expand, particularly in the derivatives market, it is crucial for the sector to adopt MVD principles to build trust and satisfy both institutional and retail investors.
The future of DeFi depends on its ability to deliver speed and reliability without compromising its foundational principles.
