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On-chain lending protocols discussing the "moat" may be an illusion. On-chain DeFi users are generally more rational and perceptive, lacking long-term loyalty to protocols. When competing protocols increase yields through large-scale subsidies, the TVL of existing protocols can quickly drain away. Smart money on-chain primarily looks at APY, with no loyalty. Imagine if a large capital enters the DeFi lending space with subsidies, combined with a second-tier lending team that has established brand trust (such as collaborating with Morpho or Fluid to ensure the safety of contract code), and offers the following more competitive conditions: - An additional 5% annual subsidy for each liquidity pool; - An increase of 5% in LTV; - Lower liquidation penalties; - A flattened borrowing curve model to reduce interest rate volatility. Then, large users of existing lending protocols like Aave are very likely to migrate. Even after the subsidies end, the new protocol may still retain a significant proportion of users, as the improvements in its interest rate curve model, LTV conditions, and liquidation penalty conditions have created substantial appeal for users, and the TVL has grown to a usable state. Kamino was once the absolute winner in the Solana chain lending space, with Lending TVL accounting for nearly 90% of the entire chain's market. However, when Jupiter invested heavily in subsidies to promote the Juplend protocol, it captured nearly 600M TVL within a week, most of which flowed out from the Kamino protocol. This may prove that the so-called moat is often hard to withstand against real monetary subsidies and discounts. Looking at the differences in user structure, when subsidies are in place, smart money is likely to choose to migrate, and the user profile of DeFi is predominantly composed of smart individuals. In contrast, the CEX space is completely different, with a large number of novice users who have a natural loyalty to CEX platforms. This irrationality, in fact, provides a stronger moat and user stickiness compared to on-chain DeFi protocols. Doing business with smart users is a tough business; doing business with foolish users is the good business. Most of the business in the DeFi space is of the former type. This is a personal opinion and may not be accurate.

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DeFi deserves more. It deserves one Unified Liquidity Layer. Fluid.