The article argues that Web3, particularly decentralized finance (DeFi), requires a clear regulatory framework that promotes innovation while ensuring user safety. It contends that a one-size-fits-all regulatory approach is insufficient due to the unique aspects of DeFi, like transparency and automation. Regulatory overreach, allegedly spurred by actions of the Biden administration, has increased uncertainty in the crypto space, though initiatives like the Markets in Crypto-Assets (MiCA) framework provide a path toward clarity. The article emphasizes the importance of self-regulation and the implementation of security measures by DeFi platforms to foster legitimacy. Additionally, it points out that clear regulations could facilitate the integration of DeFi within traditional banking, which often creates barriers for crypto projects. The piece concludes by highlighting the potential for innovation through regulatory sandboxes, where startups can test their products under regulatory supervision, thus enriching the ecosystem.

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