Polygon Labs CEO Marc Boiron called for a fundamental shift in how decentralized finance (DeFi) protocols manage liquidity, labeling the sector’s ongoing liquidity crisis as “self-inflicted.”
In an exclusive interview, Boiron outlined Polygon’s vision for sustainable DeFi, emphasizing chain-owned liquidity and transparent economic models as the path forward.
Boiron criticized DeFi protocols for fueling a cycle of “mercenary capital” by offering sky-high annual percentage yields (APYs) through token emissions. “It’s just renting liquidity; it’s not real loyalty,” he told Cointelegraph, noting that such strategies lead to fleeting liquidity that vanishes when yields drop or token prices falter. This reliance on short-term hype, he argued, undermines the sector’s stability and deters institutional adoption.
Chasing DeFi stability over hype
To break that cycle, Boiron urged protocols to prioritize fundamentals over flashy returns. “Sustainable DeFi needs models where liquidity sticks around for the right reasons,” he said, pointing to Polygon’s POL