Is TradFi or DeFi the future of crypto?

Asked 2 years ago

Hi there. I've been trying to get a hang of this TradFi and DeFi thing and was wondering if the emergence of DeFi will bring the end of TradFi. Is DeFi the future of crypto, or is it the other way around?

Carter Clemons

Friday, April 22, 2022

TradFi or traditional finance refers to current brick and mortar commercial banks and their entire structure. It included the slow payment settlement infrastructure, high fees, redundant third parties, and the way they interact with the central banks to determine the course and pace of our current financial system. TradFi also includes their lending borrowing and savings activities along with the on-ramps and off-ramp solutions and politically inspired instructions that direct the path of cryptocurrency operations.

While TradFi is crappy to a large extent, there are lots of areas such as the on-ramp and off-ramp services mentioned earlier, regulations, access to the traditional economy, and a lot of other areas where DeFi would need to agree with TradFi to see the armageddon of crypto as it is called. We know for sure that compared to the current traditional financial system, DeFi is by far more efficient, and forward-looking. DeFi also appeals more to the underserved public that is already wary of traditional finance. The resolution to this problem would see a convergence of TradFi or CeFi and DeFi with both shedding off those practices and clunky infrastructure, especially for settlement that is far behind in time, and inefficient to say the least.

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