It appears you’ve provided a headline for a panel discussion rather than a full article. Based on the projects mentioned—Hyperliquid, Ethena, and Aave—this would be a fascinating conversation about the future of Decentralized Finance (DeFi).

If you provide the full article, I can rewrite it for you. In the meantime, here’s a brief analysis of what a panel featuring these three would likely cover:

* **Aave** represents the foundational layer of DeFi: lending and borrowing. They would likely discuss the evolution of money markets, risk management in an increasingly complex ecosystem, and the integration of new asset types.
* **Ethena** represents the cutting edge of stablecoin innovation with its synthetic dollar, USDe. Their perspective would focus on capital efficiency, creating new, sustainable sources of yield, and the potential risks and rewards of these novel financial instruments.
* **Hyperliquid** represents the high-performance future of on-chain trading, specifically perpetuals. They would bring insights on scalability, user experience for decentralized exchanges, and how to compete with the speed and efficiency of centralized platforms.

A discussion between these three would likely explore how these different layers of DeFi—lending, stable assets, and derivatives—will intersect to create a more sophisticated and integrated financial system on the blockchain.

The Next Untapped Market: Perpetual Swaps for Equities

While the crypto market has matured, leaders in the space are looking toward the next major trend, with many pointing to a powerful financial instrument ready to break into traditional markets. According to Guy from Ethena, the most significant near-term opportunity lies in perpetual swaps for equities. He argues that the core business of platforms like Robinhood is driven by stock options, yet many retail traders are simply seeking leveraged exposure to a stock, not the complexities of options pricing.

In the crypto world, perpetual futures dominate derivatives, accounting for over 95% of trading volume compared to options. This, Guy suggests, proves that when given a choice, users prefer the straightforward nature of perpetuals for expressing leveraged views. With the U.S. stock market being 30 times larger than the crypto market, a “stock market version of Hyperliquid” represents a colossal opportunity. The primary obstacle has been regulatory uncertainty, but Guy predicts that within the next 12 months, the U.S. may greenlight stock perpetuals, citing recent futures product launches by Coinbase as a positive signal.

Jeff of Hyperliquid agrees, calling perpetual contracts one of crypto’s greatest innovations. He believes that good products ultimately propel regulation forward. He also notes that perpetuals could offer an elegant solution for bringing traditional finance on-chain, potentially bypassing the friction that has slowed the adoption of Real-World Asset (RWA) tokenization by avoiding complex offline processes.

From 9-to-5 to 24/7: Reshaping Market Access

The introduction of perpetuals for traditional assets would do more than just create a new product; it would fundamentally change user behavior by shifting markets from a “Monday to Friday” schedule to a 24/7 model. This constant access creates a new dynamic where market participants are compelled to act on information as it emerges, regardless of the day or time. As Guy illustrated, an analyst who learns market-moving news on a Sunday night would feel a near-fiduciary duty to trade immediately, something impossible in traditional markets.

This mechanism would actively draw traditional finance into the ecosystem rather than allowing passive participation. Jeff frames this as a form of “mathematical elegance,” where perpetuals serve as a core financial primitive for expressing a “Delta One” view—directly reflecting an asset’s price movements. The goal, he explains, is an efficient market that enables constant price discovery and ensures liquidity serves those who need it.

Reinventing Lending: Predictability and Broader Credit Models

Looking beyond trading, Stani from Aave sees a major opportunity in making Decentralized Finance (DeFi) technology accessible to mainstream users. He points to Ethena’s strategy of bundling complex on-chain yield opportunities into simpler products as a key trend. For the lending sector, Stani believes the next evolution is enhancing “predictability” through fixed-rate loans.

Fixed-rate products would offer clear benefits to both sides of the market. Lenders would gain access to a stable fixed-income opportunity, while borrowers could better hedge against interest rate volatility. The development of these products has been slow, largely due to the high efficiency of existing variable-rate lending pools like Aave’s, which already operate at 88% to 92% efficiency.

However, Stani’s vision extends to breaking the “over-collateralization” model that has defined DeFi lending. The goal is to expand credit beyond pure crypto collateral to include tokenized assets and other forms of value. By introducing fixed-income and fixed-lending primitives, a new generation of more complex and predictable financial products can be built, promising significant future growth for the entire sector.

Hello! The text you’ve provided is a question, likely from an interview or panel discussion, directed at representatives of Aave, Athena, and Hyperliquid. It insightfully raises the point about these protocols expanding into each other’s core functions and questions whether this is leading to the formation of new “DeFi conglomerates.”

Since this is a direct question rather than a complete article, it doesn’t fit the standard rewriting and editing process.

If you would like me to analyze this trend of DeFi protocol convergence, I can certainly do that. Alternatively, if you provide a full article for editing, I would be happy to process it for you. Please let me know how you’d like to proceed

The Core Debate: Specialized Primitives or All-in-One Platforms?

The guiding philosophy of Decentralized Finance (DeFi) is facing a critical debate: should projects operate like self-contained financial groups, or should they function as specialized, composable “LEGO blocks” that empower a wider ecosystem? According to Jeff from Hyperliquid, the very idea of a “DeFi Group” is a contradiction. He argues that the original intent of DeFi was for teams to perfect specific modules and then allow others to freely integrate them through APIs.

While this concept may have seemed idealistic in the past, Jeff believes it’s now becoming a reality. Hyperliquid’s strategy centers on building core financial primitives on a trust-neutral platform. Unlike centralized exchanges that control core functions like spot trading and asset tokenization, Hyperliquid’s vision is for these features to be built and maintained by the community. This open model, Jeff contends, is the correct way to build a more resilient financial system with less systemic risk by isolating potential failures within individual modules.

Guy from Ethena offers a more pragmatic perspective, suggesting that market realities often force projects into competition. He notes that there are only a handful of business models in crypto—primarily trading, stablecoins, and lending—that can support multi-billion-dollar valuations. As successful projects seek new revenue streams, they inevitably begin to encroach on each other’s territory.

Ethena’s strategy is to focus on perfecting one product before considering expansion, citing the history of failed “DeFi super apps” that tried to do everything but excelled at nothing. While Ethena doesn’t aim to be a platform itself, it embraces composability, allowing other teams to build on its core product. This creates a mutualistic relationship, as seen with teams building on both Ethena and Hyperliquid, but Guy maintains that the scarcity of lucrative opportunities is what drives the industry’s largest players toward an all-encompassing approach.

Stani of Aave positions his protocol as a prime beneficiary and enabler of this composable ecosystem. He explains that Aave’s growth is directly tied to the innovations built by other teams. As a foundational protocol for collateralization and liquidity, Aave serves as a hub for various DeFi products that need yield opportunities and capital support. Stani states that Aave is unlikely to compete in these other areas because its strength lies in this core role. The beauty of DeFi, he adds, is that developers can create interesting products that automatically integrate with other protocols without needing to negotiate API access, allowing them to focus on their unique value proposition.

A New Reality: The Blurring Lines Between DeFi and Centralized Finance

The conversation has shifted significantly from the early days of DeFi, which envisioned a purely on-chain world with no connection to fiat or centralized entities. Today, leading protocols are deeply integrated with the traditional financial system. Aave has collaborated with BlackRock, and Hyperliquid utilizes services from fintech giants like Stripe. This evolution raises a fundamental question: has the vision of “pure DeFi” come to an end in favor of a hybrid future?

Jeff from Hyperliquid suggests that DeFi should be seen as a technology rather than a separate world. He views blockchain as a superior technological stack for managing money and financial assets through global consensus. From this perspective, the trend isn’t a merger of two competing systems but rather a necessary upgrade for the entire financial industry. In the long run, he argues, better technology always wins.

According to Guy, the shift is driven by user pragmatism. He distinguishes between a small group of early crypto adopters who prioritize absolute decentralization and the much larger market of users who value scalability and user experience. The most successful applications in the current market cycle, he observes, have made compromises on decentralization to solve these more pressing issues. To build globally-oriented products, entrepreneurs can’t cater only to the niche group of “decentralization purists.”

Stani offers a different framing, arguing that the true goal isn’t decentralization for its own sake, but “resiliency.” Decentralization is simply a means to avoid single points of failure. He points to the collapse of centralized crypto lenders like Celsius, BlockFi, and Genesis, which operated as opaque “black boxes.” When the market turned, their models failed completely. In contrast, on-chain lending not only survived but thrived due to its transparency, efficiency, and lower operating costs. This, he concludes, is proof of a more robust financial system. It’s now far easier for traditional financial players to integrate with a resilient protocol like Aave than to build and risk-manage a lending business from scratch.

Identifying the Real Risks in Decentralized Finance

While the early days of Decentralized Finance (DeFi) were defined by a purely on-chain ethos, the industry has evolved. Today, leaders from top protocols argue that the goal isn’t decentralization for its own sake, but building resilient, reliable, and sustainable financial systems. In a recent discussion, founders from Aave, Hyperliquid, and Ethena explored the true nature of risk in the current crypto landscape, moving beyond common fears to identify more subtle, underlying threats.

Stani Kulechov, founder of Aave, noted that users prioritize stability and effective risk mitigation over ideological purity. “No one will use a financial product just for the sake of decentralization,” he explained. “What people truly care about is whether the system is stable.” Transparent risk controls, he argued, empower users to make better financial decisions.

Execution Risk and the Danger of Complacency

When asked about the most significant risks, Jeff, the founder of Hyperliquid, dismissed the idea of unpredictable “black swan events.” Instead, he pointed to a more insidious threat: execution risk. “We always tend to imagine some black swan events, but in reality, most system failures are not due to sudden accidents but rather due to chronic illnesses,” he stated.

He compared this to human health, where long-standing issues, not sudden accidents, are often the ultimate cause of decline. For Hyperliquid, the goal is to build a mathematically consistent system that ensures on-chain logic alone can sustain stability without relying on external assets or collateral. However, Jeff believes the greatest danger is not technical but human. “If Hyperliquid ultimately fails, the reason may not be technical or market-related, but rather that as a community, we did not build something truly valuable,” he warned. He sees complacency and arrogance as major risks for the entire DeFi sector, which has yet to fully convince the traditional financial system of its merits.

Systemic Scale, Leverage, and the Definition of a Dollar

Guy Young of Ethena offered a nuanced perspective, acknowledging that the DeFi ecosystem is much safer in some ways than it was during the last cycle. He pointed out that on-chain security has improved, with the proportion of smart contract attacks relative to the total value locked (TVL) steadily decreasing. Systemic leverage is also more transparent, unlike the opaque balance sheets of collapsed entities like Genesis and Three Arrows Capital.

However, this progress is countered by an exponential increase in scale. “The on-chain balance sheet of [major protocols] has grown 10x since 2021,” Young observed, noting their size now approaches that of a top-40 U.S. bank. While this growth is a sign of success, it also means any failure would have a severe impact. Young also raised a critical concern about the very definition of a stablecoin. He fears the industry’s “Overton Window” has shifted so far that almost any asset can be packaged and called a “dollar,” urging founders to reflect on whether this trend has gone too far.

Counterparty Risk and the Market Downturn Test

Stani Kulechov agreed that certain risk categories, like smart contract vulnerabilities, have diminished as protocols mature. However, he emphasized that the real stress test for lending protocols always comes during a market downturn. “In a stable or rising market, everyone easily gets excited about listing various assets,” Kulechov said. “But the true risk management capability is only tested during a market downturn, when liquidations are triggered.”

He cited Aave’s history of handling over 300,000 liquidations totaling $3.3 billion as proof that DeFi can build resilient systems. Today, his primary focus has shifted to counterparty risk. When integrating a new asset, Aave must assess the centralization and control mechanisms behind it. “In a purely smart contract world, everything is visible and verifiable,” he explained. “But centralized assets require more transparency.” This, he believes, is where DeFi’s ability to show “how the sausage is made” provides a distinct advantage.

Rapid Fire Insights

The discussion concluded with a series of quick questions for the founders.

When asked to name their biggest competitor, Stani Kulechov simply answered, “Banks.” Guy Young named “Circle,” while Jeff stated, “We’re not competing with anyone.”

On the most common mistake made by DeFi founders, their answers were revealing. Jeff pointed to an “early focus on infrastructure,” Guy criticized being “too insular” and focusing only on a niche user base, and Stani highlighted “overlooking composability.”