{"id":1570,"date":"2025-11-20T07:50:33","date_gmt":"2025-11-20T12:50:33","guid":{"rendered":"https:\/\/www.decentralnetwork.org\/news\/?p=1570"},"modified":"2025-11-21T07:10:58","modified_gmt":"2025-11-21T12:10:58","slug":"defi-needs","status":"publish","type":"post","link":"https:\/\/www.decentralnetwork.org\/news\/defi-needs\/","title":{"rendered":"DeFi Needs a New Layer \u2014 And Abstraction Might Be the Answer"},"content":{"rendered":"\n<figure class=\"gb-block-image gb-block-image-903c13fd\"><img loading=\"lazy\" decoding=\"async\" width=\"1200\" height=\"628\" class=\"gb-image gb-image-903c13fd\" src=\"https:\/\/www.decentralnetwork.org\/news\/wp-content\/uploads\/2025\/11\/Untitled-design-29.webp\" alt=\"DeFi Needs a New Layer \u2014 And Abstraction Might Be the Answer\" title=\"Untitled design (29)\" srcset=\"https:\/\/www.decentralnetwork.org\/news\/wp-content\/uploads\/2025\/11\/Untitled-design-29.webp 1200w, https:\/\/www.decentralnetwork.org\/news\/wp-content\/uploads\/2025\/11\/Untitled-design-29-300x157.webp 300w, https:\/\/www.decentralnetwork.org\/news\/wp-content\/uploads\/2025\/11\/Untitled-design-29-768x402.webp 768w\" sizes=\"auto, (max-width: 1200px) 100vw, 1200px\" \/><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>DeFi Needs<\/strong> a new approach, as decentralized finance has spent years battling smart-contract bugs\u2014yet one of its biggest problems isn\u2019t technical at all. It\u2019s structural. Liquidity is scattered across an ever-growing web of L1s, L2s, appchains, and bridges, each with its own fees, UX quirks, and MEV risks, creating a hidden and gradual drain on DeFi\u2019s efficiency that users rarely notice until the costs begin to add up.<\/h2>\n\n\n\n<p>This fragmentation has turned every cross-chain move into a mini-logistics operation. Capital sits idle while traders shuffle assets between networks, pay extra approvals, and manage multiple wallets or custodians. Slippage grows, pools thin out, and the experience becomes a maze instead of a marketplace.<\/p>\n\n\n\n<p>But the answer isn\u2019t \u201cone more bridge.\u201d It\u2019s abstraction \u2014 smart account layers and intent-based routers that hide the complexity of chains and let users focus solely on outcomes.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Abstraction turns scattered liquidity into a single experience<\/h2>\n\n\n\n<p>In a fully abstracted design, users simply state what they want: hedge a position, rebalance, exit, or enter a trade. The execution layer \u2014 not the user \u2014 decides which chain, pool, or venue delivers the best result. Routing becomes automatic and optimized. Settlement risks stay under the hood, and the portfolio view becomes unified, not spliced across chains.<\/p>\n\n\n\n<p>This kind of system is exactly what institutions want: one source of truth, one interface, and verifiable routing that can be audited. Even the <strong><a href=\"https:\/\/www.bis.org\/publ\/arpdf\/ar2025e.htm\" target=\"_blank\" data-type=\"link\" data-id=\"https:\/\/www.bis.org\/publ\/arpdf\/ar2025e.htm\" rel=\"noreferrer noopener\">BIS Annual Economic Report 2025<\/a><\/strong> notes that tokenized platforms concentrating liquidity could reduce frictions and improve market design. The message is clear \u2014 fragmentation is no longer just an inconvenience; it\u2019s a systemic issue.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Fragmentation is a tax on everyone<\/h2>\n\n\n\n<p>When liquidity is split across networks, protocols must hold extra collateral to protect against oracle lags, bridge issues, and cross-domain failures. Traders face higher slippage and thinner markets. More approvals, more idle capital, more operational overhead \u2014 this is how the \u201ccost of using DeFi\u201d quietly rises.<\/p>\n\n\n\n<p>A well-designed abstraction layer changes that. By unifying liquidity and proving route quality, it removes the inefficiencies that now feel baked into DeFi. Users describe the destination; solvers map the path. Smart accounts execute policies across chains without manual clicks or confusion. Liquidity goes where the trade needs it, not where the user last left it.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">But abstraction must be verifiable \u2014 not opaque<\/h2>\n\n\n\n<p>Institutions\u2014and increasingly retail users\u2014will not accept black-box routing. Every decision in the path must be provable. That means auditable data, cryptographic receipts, and controls that limit MEV exposure or latency arbitrage.<\/p>\n\n\n\n<p>The <strong>European Central Bank\u2019s Financial Stability Review<\/strong> highlights a future where interoperability is judged on reliability and transparency. Abstraction providers that can prove why a route was chosen and how it performed will win. Those who can\u2019t will be isolated.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">The future belongs to intent-based systems<\/h2>\n\n\n\n<p>If fragmentation is the tax, abstraction is the rebate. It removes bridge roulette, simplifies UX, and rebuilds trust \u2014 the core currency of any financial market.<\/p>\n\n\n\n<p>DeFi\u2019s next leap won\u2019t come from adding more chains. It will come from making them invisible. When liquidity moves frictionlessly and execution is provable, capital efficiency becomes the natural outcome.<\/p>\n\n\n\n<p>Also Read:<a href=\"https:\/\/www.decentralnetwork.org\/news\/pepenode\/\" target=\"_blank\" data-type=\"link\" data-id=\"https:\/\/www.decentralnetwork.org\/news\/pepenode\/\" rel=\"noreferrer noopener\"> Pepenode Presale Draws Attention With 596% Staking Amid Market Slump<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>DeFi Needs a new approach, as decentralized finance has spent years battling smart-contract bugs\u2014yet one of its biggest problems isn\u2019t &#8230; <\/p>\n<p class=\"read-more-container\"><a title=\"DeFi Needs a New Layer \u2014 And Abstraction Might Be the Answer\" class=\"read-more button\" href=\"https:\/\/www.decentralnetwork.org\/news\/defi-needs\/#more-1570\" aria-label=\"Read more about DeFi Needs a New Layer \u2014 And Abstraction Might Be the Answer\">Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":1571,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[9],"tags":[1065,1073,1074,1077,1075,1076,1067,1078,1068,1071,1066,1064,1070,1069,1072],"class_list":["post-1570","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cryptocurrency","tag-abstraction-layers-in-defi-explained","tag-account-abstraction-benefits-for-crypto-traders","tag-best-execution-routing-in-blockchain-networks","tag-capital-efficiency-through-abstraction-layers","tag-cross-chain-liquidity-efficiency-improvements","tag-decentralized-finance-interoperability-challenges","tag-defi-liquidity-fragmentation-solutions","tag-future-of-defi-routing-and-automation","tag-how-abstraction-improves-defi-user-experience","tag-institutional-adoption-of-defi-infrastructure","tag-intent-based-routing-in-decentralized-finance","tag-smart-accounts-for-cross-chain-execution","tag-tokenized-platforms-liquidity-concentration","tag-unified-liquidity-layer-for-defi-platforms","tag-verifiable-execution-for-institutional-defi","resize-featured-image"],"jetpack_featured_media_url":"https:\/\/www.decentralnetwork.org\/news\/wp-content\/uploads\/2025\/11\/Untitled-design-29.webp","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.decentralnetwork.org\/news\/wp-json\/wp\/v2\/posts\/1570","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.decentralnetwork.org\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.decentralnetwork.org\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.decentralnetwork.org\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.decentralnetwork.org\/news\/wp-json\/wp\/v2\/comments?post=1570"}],"version-history":[{"count":2,"href":"https:\/\/www.decentralnetwork.org\/news\/wp-json\/wp\/v2\/posts\/1570\/revisions"}],"predecessor-version":[{"id":1584,"href":"https:\/\/www.decentralnetwork.org\/news\/wp-json\/wp\/v2\/posts\/1570\/revisions\/1584"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.decentralnetwork.org\/news\/wp-json\/wp\/v2\/media\/1571"}],"wp:attachment":[{"href":"https:\/\/www.decentralnetwork.org\/news\/wp-json\/wp\/v2\/media?parent=1570"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.decentralnetwork.org\/news\/wp-json\/wp\/v2\/categories?post=1570"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.decentralnetwork.org\/news\/wp-json\/wp\/v2\/tags?post=1570"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}<!-- This website is optimized by Airlift. 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