Lately, the atmosphere in the DeFi market has been definitely strange, and retail investors are really pulling out a lot. Gas fees have decreased, and layer 2 solutions have been introduced, but it seems to have had the opposite effect.

Thinking about it, low transaction costs actually became a problem. Projects created high trading volume, low-profit environments to inflate activity metrics. As a result, investors are stuck in a situation where they have to repeatedly and tediously interact to earn minimal returns. The high APYs offered by DeFi coins ultimately tie up investor capital because of long token lock-up periods.

The principle that DeFi initially promised—"code is law"—has now become almost meaningless. Protocols are frequently and arbitrarily changed. From investors’ perspective, since rules keep changing and promises are not kept, trust is eroding.

The risks are also significant. Smart contract vulnerabilities, phishing attacks, project collapses—these can happen at any time, but the yields from stablecoins are not enough to compensate for those risks. Whales and early investors enjoy special launch schedules and off-exchange hedging benefits, while ordinary investors end up losing out, which is another problem.

In the end, many people have realized that it’s better to invest in more stable assets like Bitcoin or to protect capital through centralized exchanges rather than pouring funds into DeFi coins. There’s no longer a reason to accept the high risks, exploitation, and uncertainty in the DeFi environment. Personally, I believe these structural issues in the DeFi market are a natural consequence of retail investors withdrawing.