The post The future of DeFi isn’t on Ethereum — it’s on Bitcoin appeared on BitcoinEthereumNews.com.

Opinion by: Matt Mudano, CEO of Arch Labs  Ethereum is struggling, and decentralized finance (DeFi) is suffering as a result. Layer-2 (L2) solutions have fractured liquidity, making capital inefficient. In search of greener pastures, the community has turned to Solana — only to find a memecoin-driven ecosystem fueled by pump-and-dump schemes, attracting liquidity extractors, and turning the chain into a playground for speculation and fraud. DeFi needs a reset that returns to first principles and aligns with Satoshi’s original vision of a decentralized financial system. The only network capable of sustaining the next evolution of DeFi isn’t Ethereum or Solana. It’s Bitcoin. DeFi is struggling on Ethereum  Ethereum was once the undisputed home of DeFi, but today, it’s clear that the ecosystem is struggling. The network’s roadmap constantly changes, with no clear path toward long-term sustainability. L2 solutions were supposed to scale Ethereum. Instead, they’ve fractured DeFi into isolated liquidity silos. While L2s have lowered transaction fees, they now compete for liquidity rather than contributing to a unified financial system. The result? A fragmented landscape that makes capital inefficient and DeFi protocols harder to scale. Ethereum’s proposed solution — chain abstraction — sounds promising in theory but fails in practice. The fundamental issue is a structural misalignment of incentives, and as a result, Ethereum is gradually losing its competitive edge in DeFi. It’s time to ask: Can DeFi’s future lie in a fragmented Ethereum? Solana isn’t the answer With Ethereum losing its competitive edge, many developers and users have turned to Solana. The blockchain has seen an 83% increase in developer activity year-over-year, and its decentralized exchanges (DEXs) have outperformed Ethereum’s for five consecutive months.  There’s a fundamental problem: Solana’s DeFi growth isn’t built on sustainable financial applications — a memecoin frenzy fuels it. The recent surge in activity isn’t…

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Filed under: News - @ April 5, 2025 4:23 am