Improving DeFi security and compliance is crucial for attracting institutional investors.

From Cointelegraph

April 9, 2025 11:00 am:

Institutional players eyeing DeFi growth emphasize the need for secure and compliant platforms to attract more institutions. Adoption has surged from 10% to 47% in hedge funds, projected to hit 65% by 2025. Early adopters like Visa have processed $1 billion in crypto transactions, leading the way for institutional entry.

DeFi faces security challenges, as seen in the recent $1.4 billion Bybit hack, highlighting the need for stronger security measures and user-friendly interfaces. Vulnerabilities in smart contracts and blind signing pose risks for institutional investors, along with regulatory compliance concerns hindering large deposits into staking pools.

Institutions eye a $16 trillion tokenized asset market by 2030, emphasizing the importance of verified counterparties and regulatory compliance for DeFi participation. Privacy concerns arise as traditional players enter DeFi, potentially impacting decentralization. Balance is key in maintaining DeFi’s permissionless nature while ensuring compliance.

Intent-based architecture enhances DeFi security by reducing risks and ensuring a reliable user experience. It mitigates issues like MEV exploits and counterparty risks associated with traditional transactions. Simplifying interactions and UX for institutional investors, the architecture streamlines DeFi processes while maintaining security.

Late adopters of DeFi may struggle to keep pace with early adopters, facing more regulatory scrutiny and entry barriers. By 2026, institutional players lagging in DeFi adoption may find it challenging to compete. Regulatory clarity and standardized guidelines are crucial for broader institutional participation in DeFi, requiring collaboration among regulators, developers, and institutions.

Read more at Cointelegraph: DeFi security and compliance must be improved to attract institutions