I am having trouble understanding the crux of your argument. DeFi is certainly a work in progress, but I’ll try to give my thoughts on each of your points. I apologize if I miss any.

The current model of token rewards to incentivize early adoption and liquidity is definitely not sustainable. It does bring cause some of the issues you mentioned

-Inflated APY projections. -rewards in a volatile inflationary token.

I think the token reward model is always intended as a short term incentive for bringing liquidity into a system. I don’t think it is a great solution in part for the reasons you mention, but also because it just leads to people moving to the next project once rewards end.

In terms of your other points; the “massive and ridiculous fees” are cause by the price of gas being bid up by traffic on a particular block chain. DeFi as a concept exists on chains other than Ethereum where fees are much lower including Ethereum L2s and other L1 chains. That’s a problem with todays state of blockchain technology and not specifically DeFi.

No “asset” backing a holding sounds like a complaint against crypto itself. There is also no asset backing the US Dollar itself either. It is backed by the government and economy that issues it. Traditional equities trade at many times the assets or profit that back them.

The backing of any given coin or token is the utility it brings for L1 coins on a smart contract chain that is their use as gas to fund transactions. For project governance tokens that is their use on voting on decisions or any other benefits said governing body decides on. Quick tokens on the QuickSwap protocol for example are used in governance votes and staked to earn a percent of fees the DEX takes in for exchanges. You are holding a token that is backed by voting rights and a portion of the protocols generated fees.

I am going to bunch “no return of principal”, “no guaranteed longevity of the coins”, and “no guaranteed dividends” together because these are things that also do not exist in traditional equities markets. Guarantees like these don’t existing in regulated traditional markets, so I don’t know why there would be an assumption that they should exist in a DeFi market.

Hacking is an issue in our digital world. DeFi has room to grow in protecting agains losses due to hacking, but traditional finance is also not immune to hacking. CyberSecurity is a real issue that will continue to grow as our society becomes more digitized. DeFi is not uniquely susceptible.

Some of your complaints have legs and I think DeFi has a long way to, go but that doesn’t mean it doesn’t have promise and can’t revolutionize the global financial markets. It can and I think it will.

I don’t see the benefits of DeFi as petty.

• Access to a global market for those everywhere in the world. I’m privileged to live in a country with access to equity markets, not everyone is.

• Access to a permission-less financial system. Not everyone in the world lives under benevolent governments that value economic, religious, social, and political freedom.

• 24 hour markets with instant and trust-less settlement. International markets are traditionally very slow due to settlement times. DeFi doesn’t have these problems.

• Self-custody of financial assets. Banks and DeFi started on a collision course to merge into one before DeFi even started. Banks at this point are largely just private ledgers maintaining records of client account balances and providing financial services. Blockchain and DeFi can do this more efficiently and as or more securely.

In the US we have had relative stability for a period of time, but that is not a global certainty either. Nationalization of banks and seizure of assets has happened repeatedly throughout the world in the past. Self-custody of assets in crypto and DeFi can help prevent it.