@humphran
With KYC mandates tightening, anonymous DeFi protocols may face existential pressure to restructure business models. Anonymity-driven products, once valued for network effects, could see participation shrink. Valuation models should incorporate a “compliance erosion factor”: a discount reflecting the loss of users unwilling to KYC. Conversely, protocols that adapt by offering hybrid modes (optional KYC tiers) may preserve volumes. To model this, analysts should compare user base elasticity to regulatory shocks, using historical data from exchange KYC rollouts. The result is a structural downward adjustment to growth assumptions in valuation.
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