On The Brink with Castle Island Corn (Yearn Finance) on the Evolution of DeFi Protocols (EP. 691)
Dec 17, 2025
Dive into the evolution of DeFi with insights on how the TerraLuna crash reshaped the market. Discover the changing landscape of incentive mechanisms and the role of risk curators in this dynamic world. Corn highlights the collapse of xUSD, the implications of on-chain cybersecurity, and the appetite for DeFi among non-crypto users. Explore the nuances of token value models, the push for verifiable yields, and the tension between centralization and decentralization in the future of financial protocols.
AI Snips
Chapters
Transcript
Episode notes
Joining Yearn During The 2021 Boom
- Corn joined Yearn in Nov 2021 after moving from enterprise IT to crypto when Yearn had $6B TVL and ~125 contributors.
- He took a BD role handling customer experience and vetting many inbound strategy requests for Yearn.
Governance-Token Backed Stables Are Fragile
- Yearn refused to build strategies for UST because its governance-token backing made the peg structurally unsound.
- That decision cost deposits short-term but preserved Yearn's safety-first reputation.
Token Incentives Attract Mercenary Capital
- New multi-sig "easy button" vaults attracted capital by offering token incentives despite being opaque and risky.
- Mercenary capital chases short-term token rewards, creating persistent competitive headwinds for conservative protocols.