Honestly, the DeFi we play with is not much different from a casino in the eyes of traditional financial institutions—risk is arbitrary, regulation is virtually absent, and it’s fundamentally not a place for large capital to play.

Why do trillion-dollar institutional funds still dare not enter in a big way? Because what they want is not high returns; first and foremost, they need compliance, audits, and legal certainty. Currently, most public blockchains and DeFi projects are almost in a "naked" state in these aspects.

There is an interesting technical approach here. Some projects are starting to use technology to adapt to existing legal frameworks. For example, building a privacy protection layer—you can think of it as putting a "black box" around complex transactions, but this black box is equipped with a "privileged key" for regulators. Internal transaction details are encrypted and protected externally, but cryptographic proofs can be generated on demand to demonstrate the legality of each operation to regulators.

The brilliance of this move lies in addressing the needs of both sides. Institutions gain privacy and efficiency; regulators gain transparency and control. A subtle balance.

The practical approach is also very pragmatic: partnering with licensed exchanges to bring assets like stocks and bonds—assets under strict regulation—onto the chain first. Using the most compliant assets to verify the most compliant chains. Once a demonstration effect is formed, more asset classes will naturally have templates and precedents for on-chain integration.

With this logic, the economic model of the network becomes solid. The demand is rigid—security tokens, compliance operation fees, and various certificates within the ecosystem need collateralization. And value growth does not rely on the emotional fluctuations of speculators but on the expansion of real on-chain asset certificates and the tangible increase in financial activities.

From another perspective, this is a bet on a big trend: the era of wild growth in blockchain finance is coming to an end, and the period of compliance construction has already begun. These projects may not double your investment in a week, but they are building the core channels for large-scale institutional capital inflow into Web3 in the future.

When that pipeline truly opens, its value will be fundamental. In a noisy market, this long-term logic is indeed a precious dose of clarity.