The Aave protocol itself doesn’t have any design flaws—it’s done pretty much everything it could. The earlier departures of BGD, ACI, and Chaos Labs have nothing to do with this bad debt situation. Even if they were still around, the same thing would’ve happened. At the end of the day, the underlying assets are just too trash. L2 is also a fake narrative; it hasn’t actually solved the asset quality issue—it’s just amplifying the illusion of liquidity. Security comes with rigid costs. External and internal audits cost money, and maintaining a full security team costs a ton of money. Right now, DeFi yields and risks are completely out of proportion. You can’t expect protocols to offer APYs lower than short-term U.S. Treasury bonds while asking users to take on 10x the risk. Soon, people will start repricing risk. Protocol fees and infrastructure costs will face upward pressure; otherwise, it’ll be impossible to sustain security investments. The low-fee, high-risk model isn’t sustainable. Previously, it was all bubble-driven by speculation—DeFi yields were high because secondary markets subsidized mining tokens. Now, it’s a complete 180-degree shift toward contraction and restraint. The entire DeFi TVL can’t even hold $85B anymore. Get ready to tighten your belts—it’s going to be tough. Sigh.