Wesley Crook, CEO of FP Block
Decentralized finance has grown from an experiment in permissionless trading to a sector processing trillions of dollars in on-chain transactions. Yet, for all the progress in tokenized funds and DeFi liquidity, institutional participation remains limited. The hesitation is primarily due to infrastructure, security, and compliance standards that still fall short of what large financial institutions require.
In this interview, Wesley Crook, Co-Founder of FP Block, explains the technical and regulatory hurdles slowing institutional adoption, the engineering principles needed to make DeFi interoperable and secure, and the signs that will mark its transition from a frontier market to the backbone of global finance.
DeFi’s bottlenecks: Tokenized funds have passed $1B AUM and DeFi trading has crossed $3T, but institutional adoption still lags. From your perspective, what are the biggest technical blockers holding institutions back?
The primary technical barriers fall into two categories. From a building perspective, institutions face significant infrastructure dependencies that create unacceptable risks. They’re concerned about lock-in to external validator sets, unpredictable gas fees, and chain logic that doesn’t align with their operational requirements. Perhaps most critically, there’s the existential threat of a blockchain ceasing to be maintained, combined with the inability to integrate and maintain privacy over their proprietary data systems.
From a capital deployment standpoint, the security concerns are paramount. Institutions are hesitant to deploy substantial customer capital into permissionless DeFi smart contracts due to the persistent risk of unforeseen exploits that could drain significant assets. The immutable nature of blockchain means that security vulnerabilities can have irreversible consequences at institutional scale.
Engineering solutions: As institutions evaluate DeFi platforms, what engineering approaches are needed to deliver interoperability and resilience without compromising speed or security?
The solution lies in enabling institutions to build customizable blockchain environments without external infrastructure dependencies. This means providing the tools and frameworks for institutions to deploy their own sovereign blockchain networks that can be tailored to their specific operational, security, and compliance requirements.
However, these private institutional environments shouldn’t exist in isolation. They need secure, battle-tested bridge infrastructure that enables seamless interoperability with public permissionless blockchains. This hybrid approach allows institutions to maintain control over their core operations while still accessing the liquidity and innovation of public DeFi markets when appropriate.
Compliance by design: With regulators like the SEC and EU’s MiCA stepping in, how does regulation shape the way you build infrastructure for tokenized assets and institutional DeFi?
While clear regulatory frameworks are emerging, the challenge lies in navigating conflicting regulatory environments with divergent compliance criteria. Different jurisdictions have varying requirements for tokenized assets, custody standards, and DeFi protocol governance, creating a complex compliance matrix. The pragmatic approach is to build for the most regulatory-friendly environment initially—currently the United States—and establish infrastructure that can accommodate the highest compliance standards. This strategy positions platforms to expand globally as other jurisdictions develop more coherent regulatory frameworks and potentially converge toward similar standards.
Future of finance: Looking ahead, what signals will show that DeFi has moved from experimental to core financial infrastructure, similar to how the internet reshaped traditional industries?
The transition will be marked by several key indicators. First, we’ll see substantial increases in capital flows both onto blockchains and through various DeFi protocols, moving from billions to trillions in total value locked and transaction volume.
More importantly, we’ll witness the integration of traditional financial services into on-chain infrastructure. This includes mortgages, personal loans, and other credit products collateralized by tokenized income streams or other real-world assets.
When everyday financial products—from savings accounts to insurance policies—are seamlessly delivered through blockchain infrastructure rather than traditional banking rails, DeFi will have achieved the same foundational status that internet protocols have in modern commerce.
About the Author:
Wesley Crook, CEO of FP Block, leads a global team of software engineers and blockchain developers, driving innovative solutions. With over 35 years in consulting, he has successfully scaled FP Block, expanded into new markets, and delivered high-impact blockchain and software projects for clients.
Wesley’s leadership has solidified FP Block’s reputation for reliable, cutting-edge technology. As a Forbes Technology Council member, he shares strategic insights with industry leaders. Focused on measurable results, Wesley steers FP Block toward operational excellence and client success, welcoming opportunities to collaborate on transformative initiatives.