Rich by Coin

The panel “How Decentralized is DeFi Really?” challenged the pure decentralization ideal, arguing that temporary centralization is a necessary incubation phase for DeFi to mature. Anand Gomes, head of Paradigm and Paradex, dismissed the idea of binary decentralization and described most protocols as being in an incubation phase. Gomes compared a protocol founder to a parent: “You want your kids to be strong and independent once they grow up,” but you don’t leave them unattended in their infancy. He argued that using admin keys and centralized guardrails in the first 18 months is a fiduciary duty; a protocol exploited in its first six months simply has no future left to decentralize.

Gomes framed Ethereum’s base layer as a neutral “government” (layer 1) whose role is to ensure stability through neutral, constitutional rules, while Layer 2 founders act as “businesses” focused on growth. Buterin’s push for “stage 1” decentralization aims to keep the L1 a “freedom machine,” but Gomes contends founders must be “stubborn” in protecting their protocols during early vulnerability. Glenn Woo of Blockdaemon noted that as DeFi scales to institutional demand, hardware and security requirements naturally create layers of centralization. He argued that to survive scrutiny from global clearinghouses like the DTCC, DeFi requires professionalized, robust infrastructure that often trades absolute decentralization for institutional-grade reliability.

Benji Loh of Treehouse echoed this sentiment, noting that temporary centralization is the “price of entry” for the Wall Street tailwinds needed to fund a robust ecosystem. Arion Ho, CEO of ENI, added that the path to true decentralization must be paved with “transparent rules” rather than immediate, chaotic oversight. He also stated that starting with a rule-based, verifiable structure hard-coded into the system’s DNA helps ensure that when keys are handed to the community, the transition is safe and sustainable. As institutional heavyweights like Goldman Sachs move multitrillion-dollar operations on-chain, the panel concluded that the goal is not merely to remove intermediaries but to ensure that the protocols are mature enough to withstand global market scrutiny when guardrails are eventually removed.