Real Revenue Must Replace Token Emissions in DeFi, Declares Curve's Egorov
Michael Egorov, the founder of Curve, emphasized to Cointelegraph that DeFi protocols need genuine revenue streams to survive, as token-based incentives are increasingly ineffective at drawing liquidity.
The era of relying on inflationary token incentives to drive growth in decentralized finance (DeFi) is over, according to Michael Egorov, the founder of Curve Finance.
During a conversation with Cointelegraph, Egorov emphasized that protocols need to create genuine revenue streams instead of relying on token emissions to bring in liquidity.
"Your yield should come from revenues, not from tokens," Egorov stated to Cointelegraph. "You need real revenues flowing." He further noted that if a token "is not doing something, maybe it's better for you to not do token at all."
Egorov drew a comparison between today's market conditions and the "DeFi summer" of 2020, a period when annual percentage rates in the triple digits and even reaching 1,000% attracted capital into emerging protocols. According to him, speculative premiums at that time drove token valuations higher and helped bootstrap total value locked (TVL) across protocols.
"Right now, news doesn't change prices of tokens anymore," he stated to Cointelegraph, suggesting that market participants have "re-evaluated the risks."
These remarks arrive at a time when DeFi's TVL has declined approximately 38% during the previous six months, based on data from DefiLlama. The analytics platform's figures reveal that TVL decreased from $158 billion on Aug. 23, 2025, to approximately $98 billion as of Feb. 23.
Curve founder says revenue integration is better than emissions-driven yield
According to Egorov, protocols "cannot live without real revenues flowing," with his view being that sustainable returns need to be connected to genuine economic activity.
Although token emissions previously enabled projects to build up liquidity rapidly, he maintained that sustainable returns need to be connected to genuine economic activity.
"In 2020, people didn't care that much about risks," Egorov explained. Generous token rewards had the potential to compensate for losses in scenarios where projects ultimately failed.
"Right now, it's absolutely impossible. If you deposit something somewhere, you need to be sure that technically the protocol is safe for at least years."
He additionally connected tokens to the concept of decentralization instead of speculation. In the absence of decentralized governance, he argued, a project faces the risk of being classified as a regulated financial service.
"Tokens are needed for decentralization, not for getting rich quickly," he stated.
Previous commentary has reflected similar perspectives. In a contributed opinion piece for Cointelegraph, Marc Boiron, CEO of Polygon Labs, argued that inflationary emissions merely generate "temporary illusions of success."
Debates surrounding DeFi and centralized yield products have additionally gained renewed attention on social media platforms recently.
On Feb. 9, Vitalik Buterin, co-founder of Ethereum, made the case that DeFi's genuine value proposition is in redistributing risk instead of merely producing returns on fiat-backed assets.
From speculation to durability
Egorov also observed that speculative interest has moved elsewhere. "All the speculative premiums were stolen away by meme coins," he noted, implying that DeFi tokens currently trade based more on fundamentals than on hype.
He informed Cointelegraph that this shift in dynamics creates challenges in attracting "mercenary capital" that rapidly migrates between protocols chasing the highest yield opportunities.
He also highlighted an evolving market structure. Retail trading participants have moved toward perpetual futures markets, whereas institutional players are progressively accumulating spot assets.
Data from Defillama indicates that perpetual futures volume hit $1.37 trillion in October 2025.
In Egorov's view, sustainable onchain businesses will be required to compete based on revenue generation and capital efficiency instead of eye-catching annual percentage yields.