In the decentralized finance (DeFi) space, some experts argue that it is already self-regulated due to blockchain technology. However, this perspective neglects the role of humans who code smart contracts and introduces the potential for errors or malicious intent. Trust is identified as the critical missing component for institutional investment; compliance measures are necessary to establish this trust. The article asserts that decentralized systems cannot substitute for regulation, stressing that regulation is essential to prevent harmful logic from being integrated into the system. The potential for human error diminishes the likelihood of achieving an ideal financial system. Furthermore, regulation enhances legitimacy, which could avert bans on cryptocurrency in various regions. The need for a credible sector is emphasized, highlighting the significance of balancing innovation with regulatory frameworks. To progress toward a properly regulated DeFi future, the article advocates for synchronization between the logic embedded in DeFi and regulatory standards, thereby positioning DeFi as a credible alternative to traditional finance.

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