Blockchain as backend (aka - the tragedy of this cycle) (and why people lend below RFR on Aave) The side effect of the current app cycle is that we seem to have forgotten why we are using DeFi in the first place. 2021 taught us how toxic black box lending can be, so everyone corrected hard towards open source and conservative risk. But that’s long gone. 2025 app layer maximalists are now advising that the backend doesn’t matter, the mechanics are irrelevant and that only distribution and user acquisition matter. We pivoted so hard towards the frontend layer that we are mostly now using the blockchain for backend operations only. The worst interpretation of “settlement layer” we could have imagined. We moved away from native, on chain collateral with open source, realtime, verifiable risk engines towards black box risk management, mirror tokens, closed source DeFi, monthly attestations. No wonder the survivors fled to quality and are lending below RFR on Aave. We will look back at the last few years as the golden era of on chain lending, things will get much worse from a transparency POV. Because, of course, transparency is nowadays just a deflated marketing buzzword.