A major online lending platform in China once experienced a painful episode of international expansion. Equipped with top domestic big data risk control models and biometric recognition technology, they confidently entered the Indian market—thinking it would be an easy "dimensionality reduction" move. But reality hit them hard: the bad debt rate skyrocketed to 40%-80%.

The truly outrageous part followed. Collection agents diligently urged for repayment, while the other party casually asked, "Since you’re so wealthy, can you lend me a little more?" Some even uploaded pictures of their dogs to pass identity verification— and the system simply approved it. The core issue exposed here isn’t technical failure, but a massive disconnect between technology and reality.

Why is this happening? Because over 80% of India's population has no credit history at all. The consumer data that algorithms in the Chinese market rely on so heavily is almost nonexistent in India. Even more painfully, Indians change professions at an astonishing rate—someone might be a Bollywood extra in the morning and a street vendor in the afternoon. Any risk control model based on historical data would collapse in such a highly mobile environment.

This story serves as a mirror for the DeFi ecosystem. Today’s crypto finance world is making similar mistakes. We indulge in complex smart contracts and algorithms, believing that code can solve all financial risks. But what about reality? The essence of financial risk isn’t just a mathematical problem; at a deeper level, it’s a human and cultural issue. The power of technology is as great as its limitations—everything depends on the social soil in which it operates. The next test for DeFi is whether these protocols can truly understand and adapt to market differences across regions and cultures. Otherwise, no matter how clever the algorithms are, they’re just pretty paper tigers.