Ethereum is very cool. Aave and Compound are very cool. But today, the whole ecosystem is super insular. Crypto loans and derivatives have to be overcollateralized with cryptoassets, and so the only use case for them is levering up cryptoasset exposure. Flash loans are a unique aspect of DeFi, but they're only really useful for arbitrage of cryptoassets.
There remains a huge disconnect between cryptoassets and the real world. Things like NFT attempt to bridge, but it's basically just pretend. Owning an NFT generally provides no actual control or rights over the asset it refers to.
Until institutions start creating assets natively on the blockchain, none of this stuff has any impact on the outside world. And it's not at all clear to me that this is going to happen, because there are potentially insurmountable hurdles in figuring out how to harmonize law and the blockchain. This entire ecosystem may turn out to be a dead end, outside of the clearly demonstrated use cases of speculation and crime.