If you were in crypto in the summer of 2020, you remember the feeling. Every morning, a new protocol. Every day, a new yield opportunity. TVL graphs going vertical. Terms like "yield farming," "liquidity mining," and "governance tokens" going from jargon to daily conversation in weeks.
DeFi Summer was chaotic, euphoric, educational, and occasionally disastrous. It was also the moment that proved decentralized finance wasn't just a thought experiment — it could actually work.
How It Started
The catalyst was Compound's COMP token distribution in June 2020. For the first time, a DeFi protocol gave its governance token to its users based on usage. The concept was simple: use Compound, earn COMP.
The implication was explosive: users could earn more in yield than traditional finance offered, while maintaining custody of their assets. This was the first functional demonstration of what "money lego" could look like in practice.
What Exploded
- Uniswap became the world's largest exchange by some measures, without a single employee serving as intermediary
- Yearn Finance automated yield strategies that previously required sophisticated financial engineering
- Aave demonstrated flash loans — a concept that doesn't exist in traditional finance
- SushiSwap pioneered the "vampire attack" — a new form of competitive protocol strategy
The Dark Side
DeFi Summer also introduced rug pulls, smart contract exploits, and yield farming schemes that enriched insiders at the expense of later entrants. The permissionless nature of DeFi meant anyone could launch anything — including scams.
The Legacy
Every DeFi protocol today stands on the shoulders of DeFi Summer. The patterns it established — liquidity mining, governance tokens, protocol composability — are now the basic vocabulary of the space.
And the core insight — that financial services can run as open-source code with no human gatekeepers — is part of what makes $AIREVOLT possible. An AI agent can operate in DeFi because DeFi was designed to be used by anyone, or anything.