Polygon CEO: DeFi must abandon speculation and achieve sustainable liquidity.

Source: Cointelegraph Original: "Polygon CEO: DeFi Must Abandon Hype to Achieve Sustainable Liquidity"

Polygon Labs CEO Marc Boiron called for a fundamental transformation in liquidity management for decentralized finance (DeFi) protocols, referring to the ongoing liquidity crisis in the sector as "self-inflicted."

In an exclusive interview, Boiron elaborated on Polygon's vision for sustainable DeFi, emphasizing that "on-chain self-sustaining liquidity" and "transparent economic models" are the future direction of development.

Boiron criticized DeFi protocols for offering extremely high annual percentage yields (APY) through token incentives, claiming that this strategy has created a vicious cycle of "rented capital." In an interview with Cointelegraph, he stated: "This is just rented liquidity, not true loyalty." He pointed out that the liquidity generated by such strategies is only temporary, and once yields decline or token prices drop, the liquidity will quickly vanish. This reliance on short-term hype undermines the stability of the entire industry and deters institutional investors.

Abandon speculation and pursue DeFi stability

To break this cycle, Boiron calls on various protocols to shift their focus from "eye-catching returns" to "practical fundamentals." He stated, "Sustainable DeFi requires liquidity that can be maintained for sound reasons." He cited the POL token launched by Polygon as a blueprint for achieving this goal. "Protocols can generate returns from their own treasury rather than continuously diluting token value. In the long run, this approach can strengthen the treasury rather than just paying temporary liquidity providers."

The core strategy of Polygon is on-chain self-owned liquidity, which means that the protocol directly holds liquidity positions by building its own treasury, rather than relying on external providers. Boiron pointed out that, unlike the method of quickly attracting liquidity through token incentives that dilute token value, self-owned liquidity can bring long-term stability and capital efficiency.

Boiron stated that the only cost of this model is "time." He explained that establishing a fund through fee recovery, bond mechanisms, or limited issuance requires patience and disciplined management.

Polygon is preparing to bring traditional finance into the crypto world.

For traditional finance (TradFi), the stability and predictability of liquidity are prerequisites for the full adoption of DeFi. Boiron stated, "Traditional finance relies on stable and reliable market access models. If the liquidity of a DeFi protocol suddenly disappears or slippage rises sharply, it poses risks that institutions find difficult to accept."

However, he also pointed out that Polygon's solutions—including sustainable treasury management, proprietary liquidity, and a transparent economic model—are not only suitable for institutional users. He stated, "These are good financial foundations applicable to any protocol." At the same time, he also denied claims that Polygon's strategy is too narrow to address broader issues in DeFi.

Building a scalable blueprint for on-chain self-sustaining liquidity

As Polygon drives a "restart" of DeFi, Boiron is optimistic about the positive shifts in frameworks such as the European Markets in Crypto-Assets Regulation (MiCA) and U.S. regulation. He predicts: "In the next 12 to 18 months, we will see more institutions getting involved."

Looking ahead to 2026, Boiron hopes to see a more stable DeFi ecosystem, where volatility is reduced, community governance is stronger, and TradFi can be bridged to real-world assets through complex financial products. He stated that Polygon (POL) is expected to reduce reliance on "employed capital" and promote true decentralization.

He added that POL is the foundation for achieving long-term growth because it allows the protocol to focus on creating higher quality products and enhancing user engagement, rather than being exhausted by filling liquidity gaps or preventing token depreciation: "POL does not solve all problems, but it provides the protocol with breathing room to address larger challenges in the right way, such as user retention and capital inflow."

Boiron's core advice to DeFi protocols is clear: a sustainable economic model will ultimately prevail.

Although market pressures may tempt projects to chase high yields, he pointed out that protocols that have survived past cycles have demonstrated the value of sustainability. "Now, more and more teams are beginning to realize this." He called for the entire ecosystem to adopt a model that places greater emphasis on long-term growth, rather than being obsessed with temporary hype.

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