DeFi Requires Enhanced Interoperability Over Additional Apps or Infrastructure Opinion

**Disclosure:** The opinions expressed in this article are solely those of the author and do not reflect the views of crypto.news’ editorial team.

In the bustling realm of cryptocurrency, a prevailing sentiment has emerged: the DeFi landscape boasts an abundance of infrastructure but lacks sufficient applications. This year alone, venture capitalists and private equity investors have invested hundreds of millions into projects that prioritize, if not exclusively focus on, infrastructure development.

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The figures speak volumes. In just the first quarter, the venture capital firm a16z allocated $100 million to Eigen Layer, a restaking protocol serving as an infrastructure layer for Ethereum. Meanwhile, private equity firms Bridgewater Capital and Deus X Capital collaborated to establish a $250 million infrastructure platform, and RW3 Ventures successfully raised $60 million for a fund dedicated solely to blockchain infrastructure and DeFi. These instances are merely the tip of the iceberg; a cursory glance at any crypto news outlet reveals a myriad of similar updates.

**A Focus on Infrastructure**

This intense focus on infrastructure sparked significant discussions at the Ethereum Community Conferences (EthCC’24) held in mid-July, culminating in a shared realization: we need more applications and less emphasis on infrastructure.

On the surface, this viewpoint seems reasonable. To illustrate, concentrating excessively on infrastructure is akin to constructing a magnificent amusement park but neglecting the rides. No one will visit, let alone pay, if there are no attractions to enjoy, regardless of how well-designed the pathways or how appealing the food stalls may be.

Theoretical value and potential can only go so far in driving user adoption. A diverse array of applications could effectively attract and retain DeFi users. With more choices available, users would have greater incentive and opportunity to engage and explore.

The challenge? Simply increasing the number of applications can only address the foundational issues—such as the long-term growth and sustainability of the DeFi ecosystem—to a limited extent. Returning to our amusement park analogy, while a variety of rides is essential to draw guests, if those rides are hard to reach or unpleasant, interest will quickly wane.

**The Core Issue: User Experience**

Herein lies the true challenge at the intersection of applications and infrastructure: user experience.

It would be an understatement to say that the DeFi ecosystem, particularly the emerging BTCFi sector, isn’t user-friendly for the average person. Even simple tasks like transferring assets between decentralized applications across different ecosystems can devolve into a frustrating ordeal for everyday users. Bridging and swapping, critical for cross-chain transactions, are often bewildering for newcomers. It’s understandable why many may abandon the process or hesitate to engage in the first place.

While infrastructure is intended to facilitate the seamless onboarding of users to decentralized applications, the BTCFi ecosystem still faces fragmentation challenges among various Bitcoin (BTC) variants. Although strides have been made toward interoperability, the user experience remains cumbersome. Traditional bridges and platforms still impose significant limitations and frustrations regarding scalability, slippage, MEV issues, TVL honeypots, and slow, costly transactions.

The debate over “we need applications, not infrastructure” fundamentally overlooks the importance of both, prioritizing one at the expense of the other. The quantity of infrastructure projects is less significant than their quality and impact.

To be fair, few set out to create low-impact infrastructure projects. DeFi is characterized by a pioneering spirit, with many applications being the first of their kind, necessitating the construction of suitable infrastructure from scratch.

However, as in any race, not every participant can claim victory, and regrettably, many current infrastructure projects may remain insignificant. The era of developing projects solely for dedicated DeFi enthusiasts willing to invest time in learning to use an application is rapidly waning. DeFi is on the brink of mainstream adoption, and the novice users we aim to attract will not tolerate poor user experiences or feel compelled to understand the underlying infrastructure. To put it in relatable terms: when hailing an Uber, users aren’t concerned with whether the platform operates on AWS or Google Cloud; they simply want to reach their destination efficiently.

**Prioritizing Users**

With this perspective, our ultimate goal should be a robust infrastructure that operates behind the scenes, allowing users to engage with decentralized applications without needing to understand the mechanics at play. Navigating the DeFi ecosystem—along with every application within it—should feel seamless and intuitive. At a minimum, we must simplify interoperability, enabling fast, zero-slippage, MEV-resistant, secure swaps with consistently high-quality user experiences. Moreover, we need to prioritize the abstraction of infrastructure; users should never be required to witness the inner workings of the system.

This vision is achievable, and intent-based architecture offers a framework for user-centric development in DeFi. Unlike traditional blockchain models, which often necessitate users to follow a convoluted series of steps to achieve their goals, intent-based architecture puts users front and center. Users can articulate their objectives—such as making a purchase in a BTCFi application using funds held on Ethereum—and rely on the blockchain protocol to autonomously execute the necessary technical steps. If widely implemented, intent-based models could significantly enhance infrastructure abstraction while improving user experiences and simplifying the overall architecture.

Of course, intent-based architecture is not a panacea. Projects and protocols must collaborate closely to develop integrations that ensure seamless interoperability and mitigate operational complexities that may overwhelm users. Innovators need to design with novice users in mind, rather than catering solely to crypto experts with technical know-how.

It’s time to move beyond the infrastructure versus applications debate and concentrate on what truly matters: the users. Most individuals likely don’t fixate on architectural design or the investment disparities between application and infrastructure projects, as long as they adhere to high-security standards and fulfill their intended functions. Users desire blockchain-based financial solutions that are accessible and easy to understand; they need to be able to use applications, conduct transactions, and discover new opportunities for earning through DeFi. As advocates for DeFi’s potential, it is our responsibility to create an ecosystem that invites even novice users to engage without feeling confused, overwhelmed, or discouraged.

Let’s shift our focus from merely counting infrastructure projects to ensuring that they truly matter.

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**About the Author:**
Jeroen Develter serves as the Chief Operating Officer at Persistence Labs and brings a wealth of experience from both finance and tech start-up environments. Over the past decade, he has honed his skills in consulting, management, entrepreneurship, and leadership. Jeroen excels at analyzing complex business scenarios, streamlining operations, and establishing scalable processes. At Persistence, he oversees all product and engineering initiatives, passionately advocating for the adoption of Bitcoin DeFi (BTCFi) and leveraging intent-based architecture to develop fast, secure, and user-friendly solutions. His work addresses significant interoperability challenges among Bitcoin Layer 2 solutions. Additionally, Jeroen co-hosts the Stacked Podcast, a platform designed to educate listeners about Bitcoin and crypto through insights from leading Bitcoin developers.