DeFi revives the spirit of capitalism

Opinion by: Alexander Sudeykin, co-founder of Evaa Protocol

Many believed capitalism would be a force for innovation and personal freedom. But let’s be honest, it hasn’t lived up to the hype lately. The big fish in every industry keep gobbling up the little fish, and they’ve got the political clout to set the game board however they like.

That’s why decentralized finance (DeFi) sounds so refreshing. It’s a chance to hit the reset button by making markets fair and open rather than tilted toward a privileged few. In a perfect world, DeFi’s transparency and inclusive structure could restore some faith in the power of voluntary exchange. But as this sector grows and regulators start paying serious attention, it remains a question whether DeFi can hold onto those founding values — or if it resembles the system it is set out to replace.

DeFi is a free market revolution in finance

As a $123.5-billion industry, DeFi replaces trusted intermediaries with smart contracts through composable decentralized applications (DApps) and protocols. There’s no need to fill out tedious forms or applications to get what you need. People can borrow stablecoins, farm liquidity provider tokens, or swap coins by interacting with the DApp’s contracts at any time and from anywhere in the world.

DeFi is not like traditional finance — there are no gatekeepers. Anyone with an internet connection and a compatible device can join the ecosystem to use or develop protocols. With composable, open-source protocols, developers can reuse parts (or even all) of existing DApps or build on top of other applications to create their own solutions. These open and permissionless financial services create fair market conditions for all market participants and take competition to a whole new level.

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DeFi protocols are also non-custodial. People remain in complete control over their assets, interacting with smart contracts through their self-custodial wallets. Eliminating counterparty risks, this actual ownership over assets enhances individual freedom and prevents third-party interferences like account freezes by banks or other custodial financial providers.

Let’s be honest: DeFi isn’t perfect. It’s still in its early days, which means it carries all kinds of potential pitfalls — think smart contract vulnerabilities and impermanent loss. Even so, this “new wave” of capitalism has what it takes to tackle some of the biggest headaches in traditional finance. Of course, it has its own hurdles, too — ones that the community and developers need to address before DeFi can truly stand on its own.

The IRS and the threat of excessive regulation

Regulation has always been a significant obstacle to realizing the full potential of capitalism, and now it threatens the development of DeFi. The US Internal Revenue Service recently issued rules requiring platforms like decentralized exchanges to report transactions like brokers do. And this will take effect in 2027.

The problem is that such requirements for non-custodial platforms (which operate independently) do not fit the concept of decentralization. Moreover, it can scare off developers and force them to move to countries with more straightforward rules. This threatens the very meaning of the free market on which DeFi is built and risks concentrating everything in the hands of centralized structures again.

DeFi is about freedom: free markets, self-made success, independence. It breaks the old patterns where a couple of big players control everything and opens up new possibilities. It’s no wonder market players like Consensys and Uniswap have rebuked these new regulations. Some have even called on US Congress to overturn the IRS’ rules.

If the rules are too strict, they will drown out everything good about DeFi. So, it’s better to look for new approaches that will support the development of this industry and give it room to grow. After all, DeFi is not only about money. It is about the opportunity for people to feel freer and more confident in their finances. 

The new manifestation of capitalism

Due to regulatory uncertainty in the US, multiple crypto and DeFi projects are forced to look for friendlier jurisdictions — the United Arab Emirates, Switzerland and Singapore. If this trend continues, the global digital asset market will lose the world’s largest economy as its current leader, hindering its growth.

What is happening? Instead of adapting the rules to the new reality, regulators are trying to force decentralized technologies into the framework of the old system. The issue is not only about cryptocurrencies. This concerns the future of all technologies that operate without central control. How do you regulate something that breaks the usual rules of the game? By finding a balance. Otherwise, it will bring stagnation.

Trump’s pro-crypto approach gives hope, but DeFi projects already need to adapt: relocate to friendlier countries, implement decentralized governance through decentralized autonomous organizations or find ways to maintain the spirit of decentralization even in the new environment.

Decentralized finance is more than just a nifty tool — it’s an entire economic philosophy rooted in freedom, openness, fairness and genuine financial sovereignty. In a sense, DeFi and capitalism fit together perfectly, each reinforcing the other’s core ideals.

It’s a fresh take on capitalism designed to erase monopolistic power, distribute financial control, and bring back honest competition. That’s precisely what decentralized finance promises: a shot at restoring the spirit of true market fairness.

For DeFi to thrive, regulators should craft policies that safeguard consumers yet enable market players to keep advancing decentralized technologies. Striking that balance will protect users and keep the US at the crypto industry’s forefront rather than handing over the lead to bolder, more forward-thinking jurisdictions.

Opinion by: Alexander Sudeykin, co-founder of Evaa Protocol

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.