Navigating regulatory shifts in DeFi lending protocols

Been following the recent rumblings out of some jurisdictions about more stringent oversight for DeFi lending protocols, particularly around uncollateralized or undercollateralized loans. It makes me wonder about the practicalities for projects aiming for broader institutional adoption. How are teams thinking about adapting their existing smart contract architectures to integrate new KYC/AML requirements without compromising decentralization? It feels like a tough balancing act, especially with the global nature of these protocols.