Opinion: Doug Colkitt, Fogo founder
In order to adhere to the spirit of decentralization above all, the crypto industry often forgets its core users, traders. What exists today is an ecosystem that takes precedence over philosophical principles rather than actual use cases. This simultaneously bans most serious traders taking part in and driven decentralized finance (DEFI) users into a more centralized product.
If defi is set to scale beyond speculation, and if you provide a meaningful alternative to tradfi, the core focus must be performance.
Enter Minimum Distribution (MVD). MVD can provide a practical blueprint to maintain censorship resistance without sacrificing the speed, reliability and ease of use that the real market relies on. Here’s how MVD evolves in real time:
Tradfi is when Defi is not working
The 1990s showed historical changes in Tradfi. Since the dawn of the future of the 19th century, these markets have evolved into one of the most fluid financial ecosystems to date as a new way to hedge wheat and corn prices.
The end of the 20th century marked a major advance along with declining manual inefficiencies. Thanks to electronic trading platforms, radio frequency trading (HFT) has taken the world by storm. TRADFI has laid the foundation for a technology infrastructure designed to serve its key users, traders, by highlighting speed, reliability and execution. Tradfi has expanded globally and gained institutional trust by providing traders with exactly what they need to thrive.
In contrast, defi was born for ideology. It emphasizes decentralization with all sacrifices, unauthorized access and resistance to censorship. In doing so, block time delays, unpredictable transaction inclusion, vulnerable finality, and so on are inherited performance limitations.
For example, Ethereum’s 12-15 seconds block time is no longer usable for HFTs, and it completely moves out of the chain to successful projects like Dydx. In addition, the maximum extractable value (MEV) allows the Validator to trade frontruns or sandwiches, which can undermine the user’s trust and quality of execution.
These flaws are not just technical issues. So the Defi foundation can reduce price integrity, cause slipping and prevent serious traders from participating. Even the most popular Defi protocols today struggle to maintain power users and drive a significant amount, and while ideology is full of inspiration, it proves how scales the infrastructure is.
Traders need a working infrastructure
Defi was created to improve problems related to centralized platform-related issues (intermediaries, long settlement periods, lack of transparency), but traders, especially high frequency and institutional traders, are more interested in performance than anything else. In other words, they want a measured execution with milliseconds (not seconds), uptime during volatility, and quick, predictable and fair-stable transactions.
If DEFI wants to compete with TRADFI, distributed infrastructure must meet new technical standards such as HFT preparation. This includes 100mm sub-block time, 1 second finality, high-throughput order book, 50ms inclusive latency, ENSHRINED MEV protection, and 99.999% uptime.
Related: Current data infrastructure threatens the future of Defi
Today, these qualifiers may seem like luxury, but honestly, they are table stakes of the world’s top traders. Therefore, if Defi wants to become the new global standard for finance, you need to start prioritizing what traders care about most.
Speed and censorship resistance can coexist
One of the biggest problems with Web3 is that it often treats decentralization as a binary. Most builders believe it needs to be maximized at the cost of all. Top Performance Systems take trade-offs into account and do not adhere to the purity-only principle. That’s where the minimal viable distributed (MVD) paper comes up.
The protocol claims that it can be maintained enough to maintain what sets defi apart without sacrificing performance. Censorship resistance and unauthorized access are important at the end of the day. It is possible to maintain these ideals while creating infrastructure that is useful for the real market. With MVD, builders can consider the minimum decentralization possible, while ensuring unreliable execution. From there, they can optimize for latency, finality, throughput, and more to what is most important to make the transaction truly viable.
The new chain is leading this shift by balancing user sovereignty with lean variator sets, first finality consensus and parallelized execution. This is just the beginning. MVD is still in its early stages, and some builders have a unique opportunity to create an open, fair and usable infrastructure at the same time.
MVD raises the criteria for the next chapter of DEFI
For Defi to move past the experimental stage, MVD must be fully adopted. The demand for speed is clear. Institutions buy more digital assets every day, and retail investors are increasingly experimenting.
Today, defi is evolving rapidly, with derivatives being the fastest growing sector. The decentralized permanent market is set to handle more than $351 trillion (an increase of over 138% year-on-year) by 2031, comparable to Tradfi’s size. With early momentum from platforms like Hyperliquid and Aevo, it’s even more clear that Defi has real legs. At the same time, these protocols are still limited by layer-1 dependencies, roll-up latency and unpredictable settlement times.
MVDs need to play an even bigger role. Today, defi can’t rely solely on purity. To gain user trust, you need to rely on performance, speed, and decentralization.
Opinion: Doug Colkitt, Fogo’s founding contributor.
This article is for general informational purposes and is not intended to be considered legal or investment advice, and should not be done. The views, thoughts and opinions expressed here are the authors alone and do not necessarily reflect or express Cointregraph’s views and opinions.
