If you have been paying attention to the crypto world for the past two years, you will definitely notice a subtle yet undeniable change:
The on-chain world is increasingly resembling the banking world; and the banking world is gradually leaning towards on-chain.
Stablecoins are beginning to 'align with regulation', real-world assets are being brought on-chain, and institutions are no longer shy about discussing DeFi, but rather starting to study it:
Is it possible to truly integrate the financial discipline, risk control logic, and governance structures they are familiar with into a decentralized system?
The question is—
Most DAOs simply cannot withstand this set of rules.
This is the background for the emergence of Lorenzo Protocol, and also what makes it truly powerful.
First, the biggest problem of DAO is not lack of money, but 'no one is responsible'.
Let me say something unpleasant but very real:
The governance of the vast majority of DAOs, to put it bluntly, has only two outcomes—
Either no one votes, or even if they do, no one executes.
It is not that the community is not trying hard, but that the mechanism itself has inherent flaws:
Tokens are just voting chips, with no long-term responsibilities.
Decisions are driven by emotions, not asset-liability driven.
There is no real accountability, only 'improvements next time'.
Power and risk are not equal; those making decisions do not need to bear the consequences.
So you will see many DAOs:
Frequent direction swings.
The treasury is slowly consumed.
Decision-making becomes increasingly conservative, ultimately leading to complete inaction.
And why has the traditional banking system lasted for over a hundred years?
It relies not on cleverness, but on structure.
Second, Lorenzo has done something very 'anti-crypto': bringing banking logic on-chain.
The thinking behind Lorenzo Protocol is very unappealing but extremely lethal:
Rather than letting DAO be like a community, it is better to make it more like a bank.
The 'bank' referred to here does not mean centralized institutions but rather that which has been validated by time:
Clear capital structure.
A governance system where rights and responsibilities are equal.
Long-term risks and returns are bound together.
Clear participation thresholds and incentives.
The 'bank coin' model proposed by Lorenzo is essentially doing this.
It is not about letting you speculate with a token.
But it allows you to participate in a disciplined, constrained, and reward-cycled financial system through tokens.
Three, what is a bank coin? In one sentence: it is not a coin for shouting slogans.
The tokens of many projects are, to be honest, just 'emotional carriers':
Bull markets rely on narratives.
Bear markets rely on faith.
Lorenzo's bank coin logic is completely different, emphasizing three points:
First, participation is not free.
You are not getting voting rights for free; rather, you are genuinely putting risk in through structured products, asset allocation, or long-term locking.
Second, power comes with responsibility.
Those participating in governance not only vote but also bear the economic consequences of the decisions.
Third, returns come from system health, not short-term games.
The value of a bank coin does not come from market manipulation, but from the genuine operational financial strategies and asset management capabilities within the system.
To put it bluntly:
This token is prepared for those 'who want to participate long-term', not for those who come and go quickly.
Four, Lorenzo's core ambition: to allow DAOs to 'slow down' but go further.
You will find that many of Lorenzo's designs are in opposition to the instincts of the crypto world:
Not chasing trends.
Not relying on high APY.
Not encouraging frequent operations.
Not creating complex synthetic yield illusions.
It is more concerned with:
Is this system still around in five years?
Can the treasury survive across cycles?
Can decisions be executed stably?
Has the risk been truly priced?
This is exactly where its value as 'governance infrastructure' lies.
Lorenzo is not here to create a popular product.
It is providing DAOs with a 'governance template that can operate long-term'.
Five, why are institutions interested in such things?
Think from the perspective of institutions:
What they fear most is not low returns,
But rather unclear rules, undefined responsibilities, and unpredictable governance.
And Lorenzo just happens to provide three things they are most familiar with:
Structured financial logic: strategies, risks, and returns can be understood.
Governance is auditable: not just verbal promises, but mechanism constraints.
Long-term value alignment: participants and the system's fate are tied together.
This is why Lorenzo seems less lively, but more 'like serious business'.
Six, an easily overlooked point: Lorenzo is not trying to replace DAO, but to mature it.
Many people mistakenly believe that
Bankification = a regression of decentralization.
But Lorenzo's logic is:
Undisciplined decentralization will only collapse faster.
Truly mature autonomy is not about everyone speaking freely.
But rather:
There are thresholds.
There are processes.
There are checks and balances.
There are consequences.
Lorenzo is working to transition DAO from the 'community stage' to the 'organizational stage'.
Seven, why do I have 'blind optimism' about Lorenzo?
Not because of short-term price increases, but because of:
It addresses old problems that DAO has not solved for ten years.
It stands at the intersection of institutions and DeFi.
It has chosen the hardest, but most valuable path.
What it does is infrastructure, not gimmicks.
When the market shifts from 'speculating on concepts' to 'competing for survival',
Only systems with true governance capabilities will remain.
And Lorenzo is clearly aiming for 'staying'.
The last sentence.
If most projects are asking:
How can we attract more people in?
Then Lorenzo is asking:
When everyone is in, can the system still not collapse?
Such problems are not attractive.
But once the answer is established, the value is incredibly terrifying.
Therefore, in my view, Lorenzo Protocol is not an ordinary DeFi protocol.
But a piece that is being slowly pieced together—
Decentralized bank-level governance base.
It is not noisy, but it is substantial.
And the things that truly change the landscape are often like this.
