Svmuu News: Eli5DeFi posted on X, stating that incentive-driven DeFi models will disappear by 2026. The reason DeFi protocols lose users when incentives end is essentially that risk-adjusted returns revert to their true levels. Growth in Total Value Locked (TVL) during the incentive phase often reflects subsidized participation rather than sustained usage demand or fee revenue. The post notes that the “rented liquidity” model has three stages: the incentive phase attracts capital by offering high rewards to compensate for risk; the normalization phase, where incentives diminish and true yields become apparent; and the exit phase, where capital recalculates costs and withdraws after returns normalize. The collapse in retention rates stems from incentives temporarily masking structural weaknesses, including the risk of subsidized impermanent loss, yields that are essentially marketing expenses rather than revenue, highly internalized demand, and high friction costs. Eli5DeFi believes that retention rates can only improve if the economic model remains viable after incentives normalize. Protocols must address impermanent loss and principal risk, anchor returns to genuine demand rather than token inflation, and expand revenue streams by growing the ecosystem. Future DeFi projects should be evaluated based on sustainable revenue, capital efficiency, and risk-adjusted returns.