Fragmented liquidity is DeFi’s central scalability risk.

Opinion by: Hart Lambur, co-founder of Risk Labs.

Decentralized finance, or DeFi, is built on composability, but composability is breaking. As new chains proliferate, liquidity fragments and incentives weaken.

What was once a single shared environment has splintered into dozens of siloed markets. DeFi isn’t dead, but without the infrastructure that connects these environments, it may lose what made it powerful.

Fractured liquidity is becoming DeFi’s central scalability risk. While expanding to multiple chains was a natural response to Ethereum’s…