Death by a Thousand Pools: How Liquidity Fragmentation Threatens DeFi

The maturation of DeFi technology has created a paradox: while battle-tested codebases and rising technical proficiency have lowered the barrier to entry for launching new protocols, securing sustainable liquidity has never been harder. As thousands of projects built on increasingly standardized infrastructure compete for a finite pool of capital, the ecosystem faces a systemic challenge that threatens genuine innovation and growth.You're reading Crypto Long & Short, our weekly newsletter featuring insights, news and analysis for the professional investor. Sign up here to get it in your inbox every Wednesday source: https://www.coindesk.com/coindesk-indices/2025/04/23/death-by-a-thousand-pools-how-liquidity-fragmentation-threatens-defi