How to Build Sustainable DeFi
Ethereum Korea One: Genesis · Day 2 · 2026-09-29 · 29:20 · In English
What keeps users around once the incentives run out? At Ethereum Korea One: Genesis, builders from Compound, EtherFi, Uniswap Labs, and Radius discuss how to build DeFi that lasts.
Speakers
- Christopher Donovan, COO, Compound Foundation
- Mike Silagadze, CEO, EtherFi
- Derek Walkush, Growth Manager, Uniswap Labs
- Heejin Kim, Protocol Strategist, Radius
- Guzus, Product Engineer, Axis (moderator)
About this session
Moderated by Guzus of Axis, this panel works through five topics: incentives, fees, execution, how to respond when things break, and institutions. The panelists share what they learned from DeFi Summer, the Uniswap fee switch, solver execution risk, and the KelpDAO rsETH incident, and close with one line each on what builders should build next.
Key takeaways
- Christopher Donovan (Compound) said incentives helped create decentralized lending as a category in DeFi Summer 2020, but if they are the only reason users engage, retention suffers when they run out. He added that Compound lost its competitive edge because the protocol was not iterated for years, and is now building Compound V4 for what it calls an "institutional credit network."
- Mike Silagadze (EtherFi) said EtherFi recently turned off restaking and is evolving into a crypto neobank with external revenue: merchants pay about 3% on card spend, plus fees on DeFi strategy vaults and lending products. Part of that revenue funds cashback, budgeted as a customer acquisition cost (for example, $100 per customer), so EtherFi no longer goes "into debt by promising a token."
- Derek Walkush (Uniswap Labs) said protocol fees went live on V2 and V3 last December and on V4 in July, while interface fees were turned off and the API was made free. 99% of liquidity (dollar-adjusted) stayed. The StablePair hook, a dynamic fee hook that raises fees when a pool drifts off peg, has lifted LP returns by about 20 to 40% versus benchmarks in early data, and Uniswap's share of EVM stable-stable swaps grew from about 30% to about 65% this year.
- Heejin Kim (Radius) explained that with dynamic fees in V4 hooks, fees can change from block to block, so routes must be recalculated and CPU and latency limit how much can be searched. As a solver on CoW Protocol and UniswapX, the hardest part is the uncertainty between quote and execution, such as gas spikes and cross-chain reorgs: good execution is "delivering what you promised to the user."
- On April's KelpDAO rsETH incident, Silagadze described how a roughly $300 million bridge hack encumbered about $1.5 billion of rsETH, which in turn locked up about $30 billion in Aave, before Aave, EtherFi, Compound and others stepped in with capital as DeFi United. Donovan pointed to isolated markets and careful collateral curation, and Kim argued that "responsibility should follow control."
- On what to build: Kim pointed to hooks like StablePair, Silagadze said "Stop building casinos" and build apps with external revenue, Donovan urged use cases you can only do onchain, and Walkush highlighted better interfaces for tokenized stocks (about $20 billion on Robinhood Chain and $2 billion on X Layer).
Chapters
- Opening and panel introductions
- Incentives: lessons from DeFi Summer
- EtherFi: from points to cashback
- Where value accrues: apps vs. lending protocols
- Fees: Uniswap's fee switch
- How fee changes affect arbitrage
- Execution risk for solvers
- Uniswap's StablePair hook
- When things break: the KelpDAO rsETH incident
- What builders should build