Investment company Multicoin Capital has published a report on how the development of artificial intelligence is changing the competitive environment in DeFi and affecting the distribution of value among crypto projects.

According to the authors, AI significantly reduces the cost of creating financial products. If five years ago launching a DEX or a lending protocol could require about $3 million, a team of five engineers, and six months of work, now a significant portion of such a product can be created over a weekend using tools like Claude Code.

However, this does not mean that financial services will become easy to copy. The most valuable components of such a business — the customer base, capital, and proprietary data — take years to build.

Three key competitive advantages of DeFi

Multicoin Capital identified three main moats that will help DeFi projects maintain competitive positions amid the declining cost of software development.

Distribution

This refers to control over customer relationships, trading flows, and user balances. A company that has access to a large audience can direct it to various venues and receive a share of their revenue.

As an example, the fund cites Hyperliquid. The platform holds over $6 billion in USDC, which is used as margin collateral for derivatives trading. Thanks to control over these balances, Hyperliquid gained the ability to negotiate the distribution of revenue from stablecoin reserves.

Under the agreement with Coinbase, about 90% of the corresponding revenue is directed to the protocol's Assistance Fund. According to Multicoin Capital's estimate, with $5.5 billion in USDC, this could provide Hyperliquid with about $185 million in annual revenue.

Another example is crypto wallets. MetaMask charges a 0.875% fee for swaps, while Uniswap's average fee over the past 12 months was 0.13%. At the same time, a significant portion of Uniswap's revenue goes to liquidity providers rather than to the protocol itself.

That is, a wallet can earn more than the exchange that directly executes the trade, because it controls access to the user and can route their order to another venue.

At the same time, not every interface has a durable competitive advantage. Users can quickly transfer their seed phrase to another wallet, so the interface alone does not guarantee long-term loyalty.

The second advantage is access to the financial resources needed by traders, market makers, and lending protocols. AI can help create software, but it cannot independently provide liquidity or cover losses after financial incidents.

Multicoin Capital identifies two promising areas for the use of capital:

the first is DeFi prime brokerage. Such platforms can pool users' collateral from various venues, provide leverage, and finance trading strategies. Currently, traders often have to separately secure positions on Hyperliquid, Aave, Lighter, Morpho, Variational, and Kamino;

the second area is insurance of DeFi protocol risks. As examples, Multicoin Capital cites HLP pools on Hyperliquid and Umbrella by Aave, which help cover losses and bad debt.

At the same time, the fund considers the most sustainable model to be the use of the protocol's own balance formed from retained earnings. Unlike deposits from third-party users, such capital cannot quickly leave the platform in search of higher yields.

Proprietary data

The third advantage is access to information that is not available on the public blockchain and the ability to use it for risk assessment.

This is especially important for lending and insurance of real-world assets. For example, when issuing loans collateralized by Bitcoin or Ethereum, most of the necessary data is public. Therefore, risk assessment models are relatively easy to replicate using AI.

L1 and L2 networks may lose some advantages

Separately, Multicoin Capital examined the prospects of L1 and L2 blockchains.

Historically, such networks gave new projects access to the users and capital of their ecosystem. For example, launching a protocol on Ethereum or Solana allowed it to immediately work with the audience and assets already present in those networks.

However, the development of cross-chain interoperability, the simplification of transfers, and the emergence of fintech companies with millions of customers are gradually weakening this advantage. In addition, AI simplifies the porting of applications between different virtual machines and reduces the importance of developed infrastructure for developers, the statement says.

As a result, general-purpose blockchains will increasingly compete on transaction execution and settlement speed. At the same time, Multicoin Capital does not believe that this deprives L1 networks of value: their economic role may change, in particular due to the growth in transaction volumes and fees.

Startups can compete with traditional financial companies

Despite the advantages of large players in distribution, capital, and data, Multicoin Capital believes that startups retain an important competitive advantage — the willingness to operate in markets that traditional companies avoid due to regulatory, operational, or reputational risks. The report provides several examples:

Ethena created a synthetic dollar product based on delta-neutral hedging and scaled it to $5.4 billion in assets under management;

pump.fun and fomo created new trading products around memecoins and attracted a significant audience;

Hyperliquid entered the derivatives market, where Binance, Bybit, and OKX dominated, and began offering perpetual futures on companies before their IPOs;

Project 0 finances DeFi collateral for which traditional prime brokers are not prepared to issue loans;

USD.ai is developing lending collateralized by GPUs — a segment in which banks have limited experience.

According to the authors, startups do not necessarily need to have a durable competitive advantage from day one. It is enough for them to find a market that large players do not serve, attract customers, and over time build their own moat.

AI makes product creation cheaper, but not business creation

Multicoin Capital expects that over the next decade, trillions of dollars in financial activity will move onto blockchains. AI will make creating products to service this activity significantly cheaper, but will not eliminate the need for customers, capital, and specialized data.

Therefore, according to the fund's forecast, the most value will accrue to DeFi companies that control at least one of these resources and can turn it into stable income for investors.

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31.08.2026