Less than a month after the Pectra Upgrade, the Ethereum Foundation believes that the world’s second-largest crypto, both as a technology and as an ecosystem, is approaching major breakthroughs with higher stakes for a broader audience.

Yet those stakes could be at risk if the people steering it are entrenched in what it calls a messy process: shipping protocol.

“We must rethink our current approach to designing, developing, and stewarding the protocol,” the foundation wrote Monday, announcing the restructuring of its Protocol Research & Development teams.

The move is set to consolidate development efforts under a new “Protocol” division, focusing on three immediate goals. The foundation touts the move as a way to “respond proactively” to demands that it claims are “hard to articulate and even harder to fulfill.”

“Ethereum already powers the lion’s share of internet capital markets, onchain communities, and secures $200 billion plus in value,”  Binji Pande, growth lead at Ethereum Layer 2 scaling solution Optimism, told Decrypt. “Protocol now gives it the clarity and execution it deserves by scaling what works, improving UX, and keeping Ethereum useful for the world.”

The overhaul divides teams into three initiatives: scaling the main blockchain (Layer 1), scaling blobs for data storage, and improving the user experience.

Each initiative is assigned dedicated leadership: Tim Beiko and Ansgar Dietrichs are responsible for L1 scaling, Alex Stokes and Francesco D’Amato will oversee blob scaling, while Barnabé Monnot and Josh Rudolf are tasked with improving user experience.

But not everyone is staying and making the cut for Protocol. Some members “won’t be continuing with the Ethereum Foundation,” it said, while encouraging ecosystem projects to recruit departing talent.

Decrypt reached out to the Ethereum Foundation to learn more.

Strategic roles

The three teams will be supported by Dankrad Feist, a prominent researcher and cryptographer renowned for “Danksharding,” a blockchain optimization process named after him. Feist will work as strategic advisor to all tracks.

Last year, Feist was involved in a conflict of interest controversy, when he, alongside fellow core developer Justin Drake, confirmed they received tokens for their advisory relationship with EigenLayer, a restaking protocol for Ethereum.

“It is clear that relying on culture and individual judgment has not been sufficient, and we have been working on a formal policy to address this,” Aya Miyaguchi, the foundation’s former Executive Director, said at the time.

Still, the Ethereum Foundation’s efforts at restructuring with Protocol aim to bridge a perceived gap between research and actual implementation.

Previous upgrades, such as Pectra, faced several hurdles: testnet failures earlier this year delayed the rollout by weeks as developers scrambled to patch bugs.

Now, through Protocol, the foundation is attempting to show “the world is ready for the world computer.”

Edited by Sebastian Sinclair

New quantum physics experiments may soon test a question as old as humankind: Do we truly have free will?

Researchers say they are closing in on a way to determine whether our choices are truly our own or dictated by hidden laws of physics, according to a report published in New Scientist on Tuesday.

Quantum experiments have been designed to test the so-called “measurement independence assumption,” which proposes that hidden variables do not influence the settings chosen by experimenters, thereby proving or disproving the existence of free will.

“Many religions resolve the conflict between the concept of an omniscient God and God’s commandment not to commit sin by assuming human beings have partial free will,” University of Seville Professor Adan Cabello wrote in the report. “But if partial free will is not possible, neither is this resolution.”

In the report, the researchers developed new tests based on Bell’s inequality, also known as Bell’s theorem, a principle introduced by physicist John Bell in 1964 to demonstrate whether entangled particles exhibit correlations that can’t be explained by classical physics.

This assumption tests quantum entanglement, where particles appear to coordinate their behavior instantaneously across large distances.

Defining free will

In quantum computers, entanglement links qubits so that the state of one instantly affects the state of another, regardless of their physical separation, allowing the system to perform complex calculations in multiple directions simultaneously.

By loosening that assumption and considering the possibility that choices aren’t entirely free, the team hoped to determine whether the connections between entangled particles—known as non-local correlations, which are instantaneous across vast distances—are a fundamental feature of quantum mechanics or the result of some hidden force at play.

The concept of free will has deep roots in Western thought, emerging in ancient Greece with philosophers such as Aristotle, and shaped by Christian theology’s emphasis on moral responsibility. It later evolved through Enlightenment ideals of individual autonomy.

According to the University of California at San Diego professor of philosophy Eddy Chen, any attempt to link quantum mechanics to free will depends heavily on how free will is defined—something even philosophers and physicists often disagree on.

“Even those who’ve studied this for years struggle to define it, and seemingly clear definitions remain controversial,” Chen told Decrypt. “If you accept one, others may not. So whether quantum mechanics can prove or disprove free will depends on how free will is defined.”

A fellow of the John Bell Institute for the Foundations of Physics, Chen said that while science can inform philosophical questions, it often remains neutral on matters involving values, ultimate causes, or the nature of reality itself.

He explained that issues like free will or randomness may have scientific implications if certain assumptions are made, but those assumptions themselves are open to challenge and scrutiny.

“Some debates, especially about philosophical concepts like free will, rely on reasoning rather than empirical testing,” he said. “Science can settle questions with clear definitions, but murkier concepts are harder to resolve experimentally.”

Hidden links

The researchers’ new approach expands on Bell’s theorem by exploring scenarios where experimenters might have only partial free will, meaning their choices are not entirely independent, but still contain some degree of autonomy. According to Chen, this doesn’t weaken the argument, but broadens its implications.

“They’re not saying we lack free will. Even if someone has only partial free will, the theorem still applies,” Chen said. “As long as there’s some freedom, local interactions alone can’t produce quantum predictions. So Bell’s theorem applies not just to full freedom, but also to universes with partial freedom.”

When asked what might be controlling the “other half” of human choice if free will is only partial, Chen said finding this answer would require a radically new theory—one that not only explains everyday physics but also accounts for the hidden links between distant decisions.

“A skeptic might argue for a new physical theory that explains not only what we see, but also the hidden connections between your choice and mine, even though we’re far apart,” he said.

“Until such a theory exists, we take this seriously. This theorem may apply in cases where no such local theory can work. It’s not just hard to construct—it’s mathematically impossible.”

Quantum experiments may not resolve the debate over free will, but they are beginning to change our understanding of it.

Even a little bit of choice, researchers say, is enough to rule out simple explanations, suggesting the real mystery isn’t whether free will exists, but how much of it we actually have.

Edited by Sebastian Sinclair and Josh Quittner

Right now, protocols are stuck: cycling between incentive-driven inflows and inevitable outflows of liquidity as providers chase higher and higher returns. Even with existing bridging and wrapping solutions, because of concerns around complexity and security, most retail investors are unable to or unwilling to distribute their assets effectively across protocols. 

This leaves over $400 billion worth of idle assets locked across siloed chains whilst protocols across DeFi compete for limited liquidity, their demand vastly outsizing the available supply.  Without a global liquidity to unlock these idle assets and enable a shared source of liquidity, DeFi will struggle to supplant traditional finance and reach global adoption.

The liquidity problem

Traditional finance thrives on deep, integrated capital markets. The centralized structure of global banks means that liquidity thresholds can be proactively regulated to maintain solvency, and the sheer number of participants in permeable global markets means that there is always capital circulating within any given system. 

DeFi, by contrast, remains fragmented. A lack of compatibility between competing chains fractures the liquidity of an already small user base, whilst nontechnical participants may struggle to move their assets with the interoperability solutions that currently exist. This limits the capabilities of DeFi as a financial system; simply put, people are able to do less with their capital. This problem is captured in the one-two punch of stagnation and underutilisation.

Without access to sufficient liquidity, emerging products struggle to maintain trading volumes, lending capacity, and user activity. To attract liquidity, new projects issue native tokens and offer high APYs or governance rewards. However, whilst these strategies succeed in the short term, this capital remains trapped within individual ecosystems. 

These ecosystems suffer from sharp outflows when rewards taper off or are bettered elsewhere, slowing down the growth of new and potentially innovative projects. We even see this manifest in formerly dominant protocols, with Ethereum (ETH) struggling in the last year. This has come from a cultural shift in DeFi away from promises of long-term utility and instead towards quick returns on memecoins based on Solana (SOL), drawing capital from one silo to another in the process. 

Both the symptoms and causes of some of these liquidity issues are the vast amount of underutilised capital across DeFi. Unlocking this capital also provides a key solution. When we talk about $400 billion worth of idle assets in DeFi, we are talking about ‘premier’ tokens like XRP (XRP), Bitcoin (BTC), Dogecoin (DOGE); tokens with a high market cap, but a comparatively low TVL.

These tokens either lack the opportunity to be utilized effectively in staking and trading, or many of their holders lack the technical ability or interest to stake and restake for optimised yield. This represents a substantial imbalance in overall asset valuation and the associated DeFi protocol activity. If we could rectify this imbalance, there would be a flood of liquidity into the market. This would jumpstart the process of investment and innovation that DeFi needs.

Towards a global liquidity layer

If DeFi is to break free from the cycle of fragmented liquidity and short-term incentives, it must follow TradFi’s lead. Most importantly, it needs to develop a shared liquidity infrastructure to enable the frictionless flow of assets that prospective users have come to expect. 

The industry is not blind to these problems, and early steps toward global liquidity are already underway. Protocols like Wormhole and LayerZero allow smart contracts to complete orders across chains. Elsewhere, intent-based protocols and advancements in zero-knowledge proofs are beginning to push the boundaries of DeFi’s UX, making capital movement as simple as in TradFi offerings.

A unified liquidity layer could create, for instance, an XRP market on Solana, a DOGE market on Avalanche (AVAX), and a Cardano (ADA) market on Base. This would enable DeFi projects to function like large-scale TradFi institutions, benefiting from deep and stable capital pools, reducing the need for constant incentive programs. 

Over time, this would eliminate the short-termism of APY wars, encouraging lenders to deploy assets with greater confidence, with a unified liquidity framework mitigating exposure risks without compromising returns. Capital would be fully utilised, liquidity would flow freely to where it is needed, and DeFi’s growth would accelerate.

For retail users, this would be a breakthrough. With accessible cross-chain markets, retail investors could easily diversify their assets without having to navigate complex bridges or take unnecessary risks. Furthermore, simplified UX would lower technical barriers, making staking, lending, and trading accessible to users from day one. With reduced exposure, retail users could confidently engage in DeFi, driving adoption, introducing billions of dollars to new markets, and allowing DeFi to reach its lucrative potential. 

However, if DeFi is truly serious about global liquidity, major ecosystems must move beyond isolated solutions and establish shared standards through interoperable liquidity hubs or decentralized coordination mechanisms. Founders and developers must collaborate for a healthy and prosperous ecosystem, not compete for limited resources. 

The shift towards unlocking the free-flowing markets of DeFi’s future needs more than one single market-busting product. It will come from a sustained industry-wide effort: a cultural shift towards ambitious and user-friendly product offerings that take into account the needs of both the markets and the customers of the future. 

Conclusion

DeFi’s liquidity problem is more than a matter of inefficiency; it points to structural, cultural, and systemic issues within the industry. Only a coordinated response will allow DeFi to reach its potential. The industry is locked in a cycle of short-term incentives, with key assets siloed and protocols competing for fragmented capital; without a structural shift toward a global liquidity layer, DeFi will struggle to scale, innovate, or offer real alternatives to TradFi.

The foundations for this shift exist; it is perhaps even underway, but a coordinated response remains missing. For those that believe in DeFi’s mission, though, a future where liquidity moves freely across chains is non-negotiable; it’s the only way forward.

Altan Tutar

Altan Tutar is the co-founder and CEO of MoreMarkets, a global liquidity marketplace. He has previously worked at NEAR Foundation both as a Core Contributor and a member of the Senior Technical Business Development team.