Institutional adoption of decentralized finance (DeFi) faces significant hurdles, with regulatory uncertainty being a major roadblock. The unclear classification of crypto assets in key markets complicates compliance, deterring institutions from entering the DeFi space. While some jurisdictions offer clearer regulatory frameworks, global consistency is lacking, making institutions hesitant. Structural barriers like the lack of suitable wallet infrastructure and fragmented liquidity across decentralized exchanges also hinder institutional DeFi adoption. Risk management is crucial, as institutions need to navigate technical and economic risks inherent in DeFi protocols. To attract institutional capital, DeFi must address these challenges by developing institutional-grade solutions and comprehensive risk management tools. By meeting institutional standards, DeFi can evolve into a parallel financial system, transforming traditional finance and attracting more institutional capital. Read more AI-generated news on: https://app.chaingpt.org/news