DeFi Yield Wars Ignore User Needs as Pricing Power Drops Near Zero

Ground COO warns DeFi yield wars prioritize platform access over user needs, citing near-zero pricing power and reliance on subsidies rather than genuine demand.

Woofun AI reports that Ground COO Stephanie Vaughan argues the DeFi sector is trapped in a "yield war" that prioritizes securing distribution access on fintech platforms like Robinhood and Coinbase over addressing core user needs. She contends that protocols such as Aave and Morpho are competing to become lending infrastructure for these platforms, resulting in near-zero pricing power for DeFi products. Vaughan asserts that current yields largely stem from platform or protocol subsidies rather than organic demand, likening the model to paying "shelf fees."

She highlights operational inefficiencies in multi-strategy Vaults, including idle capital and governance delays, which create a disparity between advertised APY and actual returns. With L2 costs declining and cross-chain infrastructure maturing, she suggests DeFi should shift focus from shared Vaults to infrastructure like MPC wallets, enabling users to retain strategy control while platforms handle execution.