Will the boundaries between Decentralized Finance and TradFi disappear? The on-chain Capital Market is becoming a reality.

Question

[Coin World] Industry insiders from Maple Finance recently shared an interesting perspective: in a few years, institutional investors will no longer distinguish between Decentralized Finance and TradFi. It sounds a bit exaggerated, but upon closer thought, the logic is actually quite clear— all Capital Market activities will eventually move on-chain.

Why? Because blockchain is like the internet back in the day. The internet changed the way we shop, and blockchain is changing the financial infrastructure. The future global market will rely on on-chain technology to operate, and cryptocurrency will become the underlying infrastructure of the Capital Market. Most transactions will be cleared and settled through a public ledger, rather than using the traditional systems we have now.

More practical changes are already in the works. The debt capital market will gradually adopt cryptocurrency-native structures—Bitcoin-backed mortgages, asset-backed securities linked to cryptocurrencies, and even crypto credit cards. The receivables from these products can be directly securitized and sold to the capital market. In other words, the complex processes of traditional finance can be implemented more efficiently on-chain.

This is not a castle in the air. When these integrations truly happen, the distinction between DeFi and TradFi becomes an outdated concept.

OnchainArchaeologist · Accepted Answer

When the internet arrived, some people said traditional business would be finished, but now, aren&#39;t they coexisting... Is this time really different?

The integration of DeFi and TradFi sounds wonderful, but how do we cross the regulatory hurdle?

To be honest, institutional entry is not happening as quickly as expected. Bitcoin backed mortgage is still in the conceptual phase.

On-chain clearing and settlement sound great, but who will cover the real liquidity and risk control issues?

A few years ago, some also said stablecoins would replace SWIFT, and now what has happened... let&#39;s wait and see.

FadCatcher · Answer

What nonsense, if institutions really thought this way, they would have all entered by now. It&#39;s still because regulation is tightening their necks.

Sounds nice, but they are just waiting for the right moment to jump on the bandwagon. The people in TradFi don’t see it at all.

Years? I think it will take at least ten years, don’t think too optimistically.

I’ve heard this too many times. Every year someone says they will disrupt traditional finance, and what happens? Still stuck in place.

Bitcoin credit card, haha, the TradFi people will die laughing. They think this can replace them?

That’s not wrong, but the problem is that when institutions come in, retail investors will actually be the ones who get played for suckers. That’s the reality.

Wait, so what’s the point of buying any ETF now? Shouldn’t I just go all in on-chain?

PaperHandSister · Answer

But speaking of which, it&#39;s still a bit early to say this, right? Can those TradFi people really capitulate so easily?

On-chain clearing sounds great, but has the efficiency and cost really passed the test? I still feel like it&#39;s just a bunch of concept hype.

Is Maple trying to ride the wave of popularity or is there real data to support it? I&#39;m a bit unsure.

Bitcoin mortgage loans sound good, but how do we calculate the risks? With such large fluctuations, can we really trust to borrow?

The topic is interesting, but I&#39;ve heard this grand narrative too many times. In the end, it still depends on who survives first.

If this thing can really succeed, would it be too early to enter the market now, or is it already too late?

The disappearance of boundaries indeed sounds tempting, but the question is, who has the capability to move everything on-chain?

CrashHotline · Answer

It&#39;s another internet analogy, they say this every time, is it true?

The integration of DeFi and TradFi sounds good, but will institutions really give up their ways?

On-chain settlement sounds great, but can efficiency and cost really beat traditional finance?

Bitcoin mortgages, encryption cards... where are these products right now?

A few more years? It doesn&#39;t feel that fast, are we being too optimistic?

Institutional investors entering the market is only a matter of time, but will they completely replace TradFi? I have reservations.

Public ledger clearing and settlement, how do we solve the privacy issue? I haven&#39;t figured that out yet.

To put it nicely, it&#39;s integration, but in reality, it&#39;s still a game between two systems...

I&#39;ve heard this from Maple before, repeated many times, when will it actually land?