SEC's New Policy Opens a New Chapter for Decentralized Finance: Three Key Points That May Trigger Industry Transformation

In the ever-changing world of investment, true opportunities often lie hidden within seemingly bland policy documents. When regulatory directions shift, their impact may determine the flow of wealth in the coming years. Recently, the speech by the new chairman of the SEC at a conference on "Decentralized Finance and the American Spirit" has become a focal point of interest for industry insiders.

The impact of this meeting spread rapidly, with industry insiders even referring to June 9th as "DeFi Day." Industry observers have also noted unusual signs, believing that a new round of "DeFi Summer" may be approaching. Looking back at that hot summer of 2020, DeFi developed rapidly in an environment with relatively little regulation, creating many legendary stories. Today, this speech seems to be paving the way for a more regulated, more powerful "DeFi Summer" that may involve both institutional and individual investors.

This speech is not just an ordinary official statement, but also a deep reflection and systematic adjustment of the previous "law enforcement priority" regulatory concept. In this brand new regulatory blueprint, we can identify three key points that may reshape the industry landscape and ignite a new wave of enthusiasm. Let's interpret the profound meaning behind it together.

Market Responds Positively: DeFi Sector Generally Rises

After the chairman's speech content was announced, the capital market gave the most direct and genuine feedback. Mainstream DeFi protocol tokens surged, forming a striking upward curve, seemingly cheering for the arrival of this new direction in regulation.

According to market data, well-known projects in the DeFi field have all recorded significant increases. The decentralized lending giant AAVE and the top decentralized exchange UNI both rose by more than 13%, while the leading oracle LINK, which serves as infrastructure for the industry, also increased by nearly 6%. In addition, the liquid staking protocol JITOSOL and the real-world asset (RWA) focused ONDO both rose by more than 5%.

This set of data is not a coincidence; it accurately reflects the importance of the three key points we are about to discuss. The market reaction logic is clearly visible: the strong rebound of AAVE and UNI represents the capital's recognition of the prospects of core DeFi applications after regulatory clarity; the rise of LINK indicates that the market is optimistic about the value reassessment of the entire infrastructure layer; and the follow-up increase of JITOSOL and ONDO corresponds to the huge potential of the Staking ecosystem under "self-custody" and the RWA track in the "innovation sandbox". It can be said that the market has already cast a vote of confidence in the positive impact of the new policies through actual actions.

The first key point: the "disclaimer" of code - the foundation for rekindling the passion for innovation

In this speech, the primary and most crucial point is reflected in the new definition of developer responsibility. The chairman used a clever analogy: "It is unreasonable to hold the developers of self-driving cars responsible for third-party use of the cars to violate traffic rules or rob banks." Behind this statement is a formal acknowledgment of the principle of "code neutrality."

This is precisely the fundamental premise that allowed the summer of DeFi in 2020 to explode – "permissionless innovation." At that time, developers could freely release experimental protocols without worrying about being held accountable for potential misuse of the code. However, after certain events marked this period, the spirit of free innovation was restricted, and the developer community became wary.

This time, the discussion accurately alleviated the alarm for this innovative soil. It clearly shifted the subject of responsibility from the "creator" of the tools to the "user," which is a strong support for the foundational concept of "code as speech" in the open-source world. When the focus of regulation shifts from examining code to tracing wrongdoing, the underlying logic of the entire industry becomes clear, and an environment that allows developers to boldly experiment and iterate quickly is returning.

This is particularly beneficial for the infrastructure sector that lays the groundwork for the crypto world. Whether it's Layer 1 and Layer 2 public chains or teams that provide Software Development Kits (SDKs), one of the biggest negative variables in their valuation models has been removed. At the same time, it opens up space for value restoration in the decentralized privacy sector. When the neutrality of technology is recognized and 'privacy' is no longer equated with 'original sin', the market will reassess privacy projects that have solid technology and are committed to protecting users' legitimate rights. This undoubtedly declares that the certainty of investing in infrastructure and developer ecosystems has reached an unprecedented height.

The second key point: the "return" of property rights — the core driving force for activating liquidity

If the first key point liberated productivity, then the second key point provides the core driving force for activating liquidity. The chairman emphasized, "Having the right to self-manage private property is one of America's fundamental values, and this right should not disappear because people log onto the Internet." This statement is an official recognition of the concept of "self-custody" in the crypto world.

The summer of DeFi in 2020 revolved around liquidity mining (Yield Farming), where users would stake and lend their assets across various protocols to earn returns. All of this was built on the foundation of users having absolute control over their own assets. However, subsequent crackdowns on centralized Staking services cast a shadow over the compliance of this model.

This speech is a complete declaration of "property rights return". It shifts the narrative focus from the platform's "services" back to the users' "rights", clearly supporting users to directly participate in on-chain financial activities through personal wallets. This is not only a technical acknowledgment, but also confirms the importance of the golden rule of the crypto world, "Not your keys, not your coins", from the perspective of core American values.

What has been unlocked by this key point is an immensely vast ecosystem of Staking and its derivatives. The liquidity staking protocols (LSD), represented by certain protocols, and the restaking track, centered around certain projects, have fundamentally secured the legitimacy of their business models. Previously, the market's biggest concern (whether they would be classified as unregistered securities) has been largely eliminated, opening the door for them to mainstream financial institutions' trillion-dollar asset allocation. At the same time, the strategic value of all wallet service providers has been greatly enhanced, as they are becoming the "super application" entry points of the next generation Internet.

The Third Key Point: The Innovative "Sandbox" - The Official Incubator for the Birth of New Concepts

After clarifying the two fundamental issues of "code is law" and "property rights are sacred", the chairman presented a third, and the most constructive key point - the establishment of an "Innovation Exemption" framework. This marks a shift in regulatory thinking from "passive defense" and "after-the-fact punishment" to "proactive guidance" and "pre-planning".

The summer of DeFi in 2020 witnessed an "Cambrian explosion" of countless new concepts (such as AMM DEX, decentralized lending, algorithmic stablecoins). However, this explosion occurred in a wild land of regulation. The proposed "innovation sandbox" attempts to provide an officially certified and safer "incubator" for the next conceptual explosion.

This is an art of regulation rich in wisdom. It acknowledges that applying the rigid laws of the last century to the rapidly changing digital finance is itself an inappropriate practice. Therefore, under the premise of maintaining core bottom lines such as "anti-fraud," it has become an inevitable choice to give new things the space to trial and error, iterate, and grow in a real market environment.

This key point has opened up a brand new testing ground for all entrepreneurs with dreams and investors with a discerning eye. Whether they are pioneers committed to tokenizing real-world assets (RWA) such as real estate and bonds, or dreamers envisioning a decentralized social future, they now have a "green channel" to quickly validate their ideas with expectations. For venture capital firms (VC) and early-stage investors, this means that the largest systemic risk in their portfolios—regulatory mutation risk—has been significantly reduced.

Future Outlook: The Beginning of a New Wave of Decentralized Finance

The chairman's speech is like a key that opens the door for us to understand the new policies. These three key points - the exemption of code, the return of property rights, and the innovation sandbox - are interconnected and together build a clearer, more friendly, and more vibrant new regulatory paradigm.

If the DeFi summer of 2020 was a grassroots carnival driven by geeks and adventurers, then what this new policy suggests could be a "DeFi Summer 2.0" involving developers, retail investors, and Wall Street giants. It will no longer be a wild growth, but an orderly prosperity under clear rules.

This is not only about the short-term benefits of several sectors but also a profound long-term value reassessment. It indicates that the United States is reshaping its leadership position in the global crypto economy with a more confident and open posture. For each of us in this industry, understanding these signals and transforming them into deep insight may be the key to navigating bull and bear markets and seizing the pulse of the next era. The wheels of history have begun to turn, and a more mature and prosperous new chapter in crypto is slowly unfolding.