The worlds two biggest financial primitives are borrowing and lending. These two primitives make up a large portion of the total financial activity in the worlds markets. It allows all other financial primitives to exist. As an analogy to programming, borrowing and lending is essentially the lowest level on the stack, where all other financial primitives are built on top of. In order to have derivatives, insurance, funding, etc. you need liquidity and borrowing and lending. DeFi on Ethereum is replicating the existing financial system, so by criticizing this, you're essentially also criticizing the legacy financial system.
Now that there's tons of liquidity on Ethereum, people have been building applications ontop of this financial stack. In the programming analogy, these applications are higher up on the stack (like web browsers) and rely on the primitives to build out financial infrastructure.
Now that there's tons of liquidity on Ethereum, people have been building applications ontop of this financial stack. In the programming analogy, these applications are higher up on the stack (like web browsers) and rely on the primitives to build out financial infrastructure.