On-chain finance has been brainwashed by the word "efficiency" over the past few years. Improving capital efficiency, liquidity efficiency, yield efficiency, trading efficiency—sounds all right, but those who truly understand know: DeFi is still stuck in the primitive stage of "asset efficiency," and has not yet advanced to the level of "structural efficiency."

Let's clarify these two concepts first. What is asset efficiency? Simply put, it's about playing with your assets—reusing them repeatedly, nested layers, leverage, cross-chain flows—the goal is one: to squeeze every bit of financial attribute out of the assets. It may look highly efficient in the short term, but in the long run? That’s a landmine waiting to explode.

Why? Because all these "efficiency gains" rely on the same thing or the same market behavior to support them. Once this support shakes, the entire system is prone to collapse. This is the real reason why DeFi often thrives in bull markets and crashes in bear markets—asset efficiency is too high, but the structure is extremely fragile.

Imagine this: what does higher asset efficiency mean? It means the system is more prone to imbalance. Lower structural efficiency? It means risks are more concentrated. When these two negative factors combine, you see the growth pattern of DeFi over the past decade:

Can collateral be used multiple times for borrowing? Yes!
Can LP tokens be reused two or even three times? Yes!
Can yields be stacked layer upon layer? Yes!
Can cross-chain assets flow everywhere? Yes!
Can TVL be repeatedly staked? Yes!

On the surface, each "yes" makes the ecosystem more prosperous, but in reality, each "yes" adds weight to the system. Without structural support, increasing asset efficiency is like stacking explosives in a building without firewalls—appearing to operate efficiently, but actually pushing dangerously close to the point of imbalance. Because all leverage is piled into a building without proper infrastructure support.

This is the real hidden danger of DeFi.