Polygon CEO: DeFi must ditch hype for sustainable liquidity
Polygon Labs CEO Marc Boiron called for a fundamental shift in how decentralized finance (DeFi) protocols manage liquidity, labeling the sector’s ongoing liquidity crisis as “self-inflicted.”
In an exclusive interview, Boiron outlined Polygon’s vision for sustainable DeFi, emphasizing chain-owned liquidity and transparent economic models as the path forward.
Boiron criticized DeFi protocols for fueling a cycle of “mercenary capital” by offering sky-high annual percentage yields (APYs) through token emissions. “It’s just renting liquidity; it’s not real loyalty,” he told Cointelegraph, noting that such strategies lead to fleeting liquidity that vanishes when yields drop or token prices falter. This reliance on short-term hype, he argued, undermines the sector’s stability and deters institutional adoption.
Chasing DeFi stability over hype
To break that cycle, Boiron urged protocols to prioritize fundamentals over flashy returns. “Sustainable DeFi needs models where liquidity sticks around for the right reasons,” he said, pointing to Polygon’s POL token as a blueprint for achieving this.
“Protocols can put their treasury to work, earning yield instead of diluting token value. Over time, this strengthens the treasury rather than just paying off temporary liquidity providers.”
Polygon’s approach centers on chain-owned liquidity, where protocols build treasuries to directly own liquidity positions rather than relying on external providers. Unlike token emissions, which Boiron said attract liquidity quickly but dilute token value, owned liquidity offers long-term stability and capital efficiency.
The only trade-off in the plan, according to Boiron, is time. He explained that building a treasury through captured fees, bond mechanisms or limited emissions requires patience and disciplined management.
Polygon prepares to onboard traditional finance in crypto
For traditional finance (TradFi), liquidity stability and predictability are prerequisites for full DeFi adoption:
“Traditional finance runs on models that need stable, reliable market access. If a DeFi protocol suddenly loses liquidity or slippage spikes, it creates a level of risk most institutions just won’t take.”
However, Boiron said that Polygon’s solutions — sustainable treasury management, owned liquidity and transparent models — are not just for institutions. “These are good financial fundamentals that work for any protocol,” he said, dismissing suggestions that Polygon’s strategy is too narrow to address DeFi’s broader issues.
Related: Yemenis are turning to DeFi as US sanctions target Houthi group
Building a scalable blueprint for chain-owned liquidity
As Polygon pushes for a DeFi reset, Boiron remains optimistic about getting support from frameworks like Europe’s Markets in Crypto-Assets Regulation and evolving US guidance. “We’re 12–18 months away from seeing a lot more institutional involvement,” he predicted.
Looking to 2026, Boiron envisions a more stable DeFi ecosystem with less volatility, stronger community governance and sophisticated financial products bridging TradFi and real-world assets. He said Polygon (POL) could reduce reliance on mercenary capital, fostering true decentralization.
He added that POL is the foundation for long-term growth, as it helps protocols focus on building better products and keeping users engaged, instead of plugging liquidity gaps or diluting tokens to stay afloat:
“POL doesn’t solve everything on its own, but it gives protocols the breathing room to tackle bigger challenges like user retention and capital inflows the right way.”
Boiron’s core message to DeFi protocols is clear: “Sustainable economics always win in the long run.” While market pressures make it tempting to chase high APYs, he noted that surviving protocols from past cycles prove the value of sustainability. “More teams are starting to get it,” he said, urging the ecosystem to adopt models that prioritize long-term growth over fleeting buzz.
Magazine: Ethereum is destroying the competition in the $16.1T TradFi tokenization race
Many Labour MPs have been left shellshocked after the chaotic political self-sabotage of the past week.
Bafflement, anger, disappointment, and sheer frustration are all on relatively open display at the circular firing squad which seems to have surrounded the prime minister.
The botched effort to flush out backroom plotters and force Wes Streeting to declare his loyalty ahead of the budget has instead led even previously loyal Starmerites to predict the PM could be forced out of office before the local elections in May.
“We have so many councillors coming up for election across the country,” one says, “and at the moment it looks like they’re going to be wiped out. That’s our base – we just can’t afford to lose them. I like Keir [Starmer] but there’s only a limited window left to turn things around. There’s a real question of urgency.”
Another criticised a “boys club” at No 10 who they claimed have “undermined” the prime minister and “forgotten they’re meant to be serving the British people.”
There’s clearly widespread muttering about what to do next – and even a degree of enviousness at the lack of a regicidal 1922 committee mechanism, as enjoyed by the Tories.
“Leadership speculation is destabilising,” one said. “But there’s really no obvious strategy. Andy Burnham isn’t even an MP. You’d need a stalking horse candidate and we don’t have one. There’s no 1922. It’s very messy.”
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Starmer’s faithfuls are ‘losing faith’
Others are gunning for the chancellor after months of careful pitch-rolling for manifesto-breaching tax rises in the budget were ripped up overnight.
“Her career is toast,” one told me. “Rachel has just lost all credibility. She screwed up on the manifesto. She screwed up on the last two fiscal events, costing the party huge amounts of support and leaving the economy stagnating.
“Having now walked everyone up the mountain of tax rises and made us vote to support them on the opposition day debate two days ago, she’s now worried her job is at risk and has bottled it.
“Talk to any major business or investor and they are holding off investing in the UK until it is clear what the UK’s tax policy is going to be, putting us in a situation where the chancellor is going to have to go through this all over again in six months – which just means no real economic growth for another six months.”
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Why is the economy flatlining?
Read more:
Starmer and Reeves ditch plans to raise income tax
Former chancellor Osborne is shock contender to head HSBC
After less than 18 months in office, the government is stuck in a political morass largely of its own making.
Treasury sources have belatedly argued that the chancellor’s pre-budget change of heart on income tax is down to better-than-expected economic forecasts from the Office for Budget Responsibility.
That should be a cause of celebration. The question is whether she and the PM are now too damaged to make that case to the country – and rescue their benighted prospects.
People granted asylum in the UK will only be allowed to stay in the country temporarily, in sweeping reforms expected to be announced on Monday.
Modelled on the Danish system, the aim is to make the UK less attractive for illegal immigrants and make it easier to deport them.
Planned changes mean that refugee status will become temporary and subject to regular review, with refugees removed as soon as their home countries are deemed safe.
Under current UK rules, those granted refugee status have it for five years and can then apply for indefinite leave to remain and get on a route to citizenship.
In a social media video trailing her announcement, Home Secretary Shabana Mahmood said: “We will always be a country that gives sanctuary to people who are fleeing danger, but we must restore order and control.”
She called it “the most significant changes to our asylum system in modern times”.
An ally of the home secretary said: “Today, becoming a refugee equals a lifetime of protection in Britain.
“Mahmood will change that, making refugee status temporary and subject to regular review. The moment your home country is safe to return to, you will be removed.
“While this might seem like a small technical shift, this new settlement marks the most significant shift in the treatment of refugees since the Second World War.”
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UK looks to Denmark for tougher immigration policy
Time and money ‘wasted’ on Rwanda scheme
While the number of asylum claims across Europe has fallen, numbers in Britain have risen.
Ms Mahmood said the previous government had had “years to tackle this problem” but had “wasted” time and money on the £700m Rwanda scheme.
Read more: Could Danish model save Labour’s bacon?
Some 39,075 people have arrived in the UK after making the journey across the Channel so far this year, according to the latest Home Office figures.
That is an increase of 19% on the same point in 2024 and up 43% on 2023, but remains 5% lower than at the equivalent point in 2022, which remains the peak year for crossings.
Other changes expected to be announced on Monday include requiring judges to prioritise public safety over migrants’ rights to a family life, or the risk that they will face “inhuman” treatment if returned to their home country, the Telegraph has reported.
Denmark’s tighter rules on family reunions are also being looked at.
Read more politics news:
Under-fire Starmer aide won’t quit
Plans to raise income tax in budget ditched
Pic: Reuters
Changes will prevent refugees from ‘integrating into British life’
While some research has suggested that deterrence policies have little impact on asylum seekers’ choice of destination, but a 2017 study said Denmark’s “negative nation branding” had proved effective in limiting asylum applications.
The number of successful asylum claims has fallen to a 40-year low in Denmark, with 95% of failed asylum seekers deported from the country.
But some believe the changes could damage future generations seeking a haven from war, persecution and violence.
Enver Solomon, chief executive of Refugee Council, said: “These sweeping changes will not deter people from making dangerous crossings, but they will unfairly prevent men, women and children from putting down roots and integrating into British life.
“Refugee status represents safety from the conflict and persecution that people have fled.
“When refugees are not stuck in limbo, they feel a greater sense of belonging, as full members of their new communities with a stable future for themselves, their children and generations to come.
“We urge the government to rethink these highly impractical plans, which will also add to the backlog and chaos that the Home Office is tackling.
“Instead, they should ensure that refugees who work hard and contribute to Britain can build secure, settled lives and give back to their communities.”
Shabana Mahmood will be appearing on Sunday Morning with Trevor Phillips from 8.30am tomorrow.
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