Pecking Order
Pecking Order – A cartoon that illustrates the pressure the nascent DeFi (Decentralized Finance) industry faces from TradFi (Traditional Finance) and AI agents.
The original promise of DeFi was to rebuild financial services on open blockchain rails and make them universally accessible. Protocols like Uniswap and Aave proved that trading, lending, and yield generation could be executed without intermediaries, and at its peak, DeFi’s total value exceeded $250BN. The vision was a globally accessible, programmable financial system where anyone with a smartphone could participate.
That vision has since been squeezed from multiple sides. Trust, the foundation of self-custody, has been repeatedly undermined by security failures. As a recent example, April 2026 alone saw roughly $600M lost to exploits in just a few weeks, reinforcing a broader pattern of multi-billion dollar annual losses across the ecosystem.
Meanwhile, the ‘access’ narrative has been captured elsewhere. Fintech platforms like Revolut and Block have onboarded millions of users through clean, abstracted interfaces, often using blockchain rails without exposing users to DeFi complexity. Also, institutions such as BlackRock and JPMorgan have entered digital assets with regulatory cover, turning what was once a disruptive movement into a product extension within traditional finance.
The final pressure comes from automation. AI agents are increasingly executing financial strategies directly, removing the need for users to actively engage with DeFi at all. Which is probably the right use case anyway, since most users never had the patience to manage DeFi themselves.
What began as a consumer-facing revolution is evolving into backend financial infrastructure, while the interface layer is being captured by fintechs, institutions, and now autonomous agents.
