Opinion: Only by returning to the essence of P2P trading can DeFi achieve large-scale popularity.
According to Cointelegraph, the current mainstream DeFi protocols are gradually deviating from the original intention of peer-to-peer (P2P) trading and turning to rely on liquidity pools, external oracles and automated market makers (AMMs). While this shift has improved capital efficiency, it has led to the loss of collateral options and the ability to manage risk, as well as the increased vulnerability of the system due to centralized oracle manipulation – the Hyperliquid exchange's total value locked (TVL) plummeted from $540 million to $150 million due to a recent crisis of confidence triggered by human intervention in oracle pricing.
Industry analysts point out that the design of liquidity pools is making DeFi gradually converge with traditional financial systems, which goes against the core principles of open transparency and permissionless interaction. The early P2P lending model once achieved autonomous negotiation of collateral between both parties through smart contracts.