Opinion by: Shaaran LakshMinarayanan, co-founder of Multipli
Defi gold products are broken fundamentally.
In spite of tether gold with more than $ 800 million Locked in tokenized gold with gold paxos sitting almost as much, yields average under 1% while traditional finances make up 3% -5% in the same property. Blockchain technology should change somehow that gold is less profitable.
It was frustrated defi pledged to —democratize Sophisticated financial techniques, but when it comes to gold, we have watery products that are underperform investment methods of a century.
Token printing of masquerades as innovation
Most Defi gold protocols do not form real yields – they print tokens. There are many gold-related tokens related to the double-digit “release” yield to attract deposits. Juicy annual percentage rates (APY) rely on printing new tokens rather than generating a new income, so when the price of the token drops or stops the leaks, often crashes into nothing.
The protocol does not create value but redistributed the existing value by inflation, a classic Ponzi structure identified as a change.
This pattern repeats the entire gold defi, with protocols launching unstable rewards rewards to attract the total amount locked (TVL), then watching crater yields when the reality sets. Exit tokens create an illusion of productivity while destroying long-term value by diluting existing holders when protocols cannot produce real returns.
Forced complexity destroys the return
Gold investors want gold exposure. The Defi forces them in PABAGU -CHANGE of PARTS OF THE PARENTS AND POOLS OF LIFE THAT SUBOPTIMAL RESULTS. During the gold rallies, liquidity providers suffer from heavy loss as their gold is automatically sold for stablecoins, missing the reverse they invest in gold to get.
These LP structures also are not effective in capital, forcing half of investor funds to low yield stablecoins instead of gold exposure. Calculation of risk reward becomes absurd. Investors accept an imperfect risk of loss and have reduced gold exposure for yields almost more than what they can earn directly in handling stablecoins.
Missing a real chance
Defi protocols lack infrastructure to copy traditional financial techniques in size. Gold futures often trade in premiums to see prices, especially in Contango markets. Sophisticated entrepreneurs can get this spread by handling physical gold and shorting futures contracts, certainly what should prevail over automation.
Related: Tether gold rides bullion boom as central banks, ETFs rush to accumulate
The result: institutional players continue to earn a glamorous -gold return as Defi investors are stuck with inflationary rewards and forced complexity. True money will remain in traditional finances as the Defi fights scraps.
The path forward
New protocols are finally addressing these basic flaws through market arbitration techniques instead of printing the token. Because of this change, they form a real yield by obtaining spreading contangs.
Investors can get pure gold exposure with a return to grade-institutional. This method democrats techniques that have previously required $ 5 million minimum and direct institutional relationships, making the fence fund opportunities accessing just $ 1,000 and a purse.
Keep it simple
The best defi products are removing unnecessary complexity, providing exposure to gold investors without forcibly variable. Single-sided staking maintains the thesis of the investment while developing yield through arbitration techniques.
This explains why tokenized gold underperforms are decades physical gold techniques. The industry appreciates the rapid expansion of the sustainable economy, TVL growth in actual return.
Consequences in the market
The frustration of the gold defi reflects the broader issues of how we think about the generation of harvest. Too many protocols precede TVL’s growth in the sustainable economy and optimize for launching metrics rather than creating a long-term value.
Real solutions require infrastructure investment in proper derivatives trading capabilities, risk management systems and grade-institutional implementation. That is harder than launching another liquidity mining program.
The market grows, however, as investors increasingly recognize the difference between Real harvest and token releases, demanding the actual value creation in higher APY numbers.
The catalyst in adoption
The next wave of defi adoption will come from real produce, not speculation, as traditional finance faces increased regulation pressure and institutional investors looking for successors that deliver comparable returns with better transparency. Gold represents the perfect test area of good understanding of the property class, documented arbitration opportunities, and proven demand for yield.
The question is not whether the gold defi will work. This is which protocols will finally deliver the original promise with existing technology, proven techniques, and a ready market.
The golden haste continues, but at this time the gold can only strike.
Opinion by: Shaaran LakshMinarayanan, co-founder of Multipli.
This article is for general information purposes and is not intended to be and should not be done as legal or investment advice. The views, attitudes, and opinions expressed here are unique and do not necessarily reflect or represent the views and opinions of the cointelegraph.
