Topic: Decentralized Finance vs Traditional Finance (Read 281 times)

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What would you say? Curious to hear

Decentralized finance is definitely the winner among the two because it simply has more features and benefits for the end user so im sure decentralized finance is the way forward the only thing it lacks is compliance towards regulators and govts but obviously it is the govts. Who have to define the rules for them, if necessary.

The decentralized exchanges are as easy to manipulate as the central markets. The only difference is that central exchanges are in a position of manipulating any and all the tokens. In cases of DEX, the manipulator varies from token to token. It generally works like this. Some anonymous developer announces a project and a token generation date. Those tokens are listed on a DEX with much fanfare and are priced way higher than the utility. People FOMO because of all the good noise and then end up losing to the whales. Would you consider sharing any personal experience about the manipulation? Losing money in the market is not necessarily manipulation though and just the way investments work sometimes. The odds are almost always stacked against the small players.

Thats an interesting name. Are we going with amphibians these days rather than food. What do you think about them and who are the developers? Hope they are not anonymous.

I think Defi will be a future solution as a savings and financing mechanism. The reason is, Defi will continue to create new innovations that will facilitate digital financial transactions. All developers continue to innovate in the defi system. Later Defi will be more crowded and really present to be a solution to financial problems around the world.
On the other hand, the development of blockchain and cryptocurrency gave birth to new innovations that led to the creation of tokens to run the blockchain ecosystem that was formed. A group of open source programmers recently created Tadpole Finance.
besides technology finance will not be separated from traditional finance because before we go to technology we first go to the traditional.

I don’t know about the others, I’m tired of the market being manipulated by large players for a long time. I believe that the more trading moves to decentralized exchanges, the less opportunity there will be to manipulate the market. The only problem is high commissions!

The problem is not about how widely or how many people use these decentralized financial services. The current problem is of maturity of the space itself.

This forum brought bitcoin where it is because of the quality of discussion and the people it brought in. Apart from the technically bent, the early people were equally aware of the gains to be made. I think DeFi as a concept is pretty much at that stage. Most of the good guys out there aren't even on this forum as most DeFi platforms have forums of there own. If those people were here, i think the quality of discussion would have been a lot better.

Easier said than done i would say, yes the opportunity to become your own bank is more available than before but statistically speaking it is still not the same, not even close, the number of people depending on traditional financial institution to do their bidding is far more greater than those who have the technical know how with decentralize finance,
Just because the internet is available don't mean the majority are using it for purposes like the aforementioned, there is a lot to be done before this can beginning to be noticed, at present those who are using decentralize service are very little to be noticed, perhaps in latter years, but not in the immediate future.

i dont think traditional finance will be replaced soon. yes, defi is getting stronger but not many people are well-versed about its existence. majority of the population are still dependent on their traditional financial institutions.
also, with so many defi platforms exiting at early stage because lets admit it, a lot of them are scammers. so how can you entice ordinary noncrypto users to trust defi platforms if most of them have no working platform and some already abandoned their respective projects because they already pocketed the money from naive buyers?

Actually also unfair control over the resources of knowledge of labor,,, as you said the monopoly by big banks. It is a bigger system than that. Companies and banks and governments are all interlinked. They have a huge network. You go to school together, you get internships and jobs together, and you end up working together. To go into their circle you must comply.

Internet helped to break this but in the end internet and knowledge now is also controlled by the same circle more and more. Google and Yahoo etc all joined that circle.

The world order is now changing and ideas are updated on many subjects. Economy is one of them. Decentralized finance methods will now override traditional finance. It is very difficult to happen at once, but decentralized finance is getting stronger. With the new economic order, economic transactions will be cheaper, transparent and secure. We all believe in this to the fullest 

Great responses in this thread guys.. It is necessary that we ask questions beyond just speculating about our own projects. My aim in starting this thread was to get such interactions and concerns about the space discussed. The discussion till now has been really good.

Good questions. Right now most people are using the DeFi lending platforms to take loans or to lend their crypto-wealth to earn returns on it. The satisfaction with relation to TradFi cannot be measured because TradFi doesn't give this level of control or returns to anonymous individuals.

This is a difficult and tricky part. This has no easy answers but this much is sure, the solutions have to come from within the community. It is clear that the hundreds and thousands of individuals in this space aren't criminals or tax evaders. Yet, it is highly unlikely that the Govt will allow them to function without getting some sort of share.
The industry has to come up with its own standards and self-regulations.

Totally true. The starting post is more of an invitation towards thinking in DeFi terms vs TradFi terms and not pitting each other. It can be seen as an opportunity for more people to become part of the "game" where only a very few had access or, more importantly, interest earlier. There is a flurry of activity and it will continue to remain significant.
How does that play against the goal of privacy is something that the community is divided over?

Love your view on this. It is indeed a cultural and a empowerment thing.

Good point. The TradFi or Big Money may have to evolve and in a best case scenario, will become more transparent and not as easily manipulated and corrupt as it is at present.

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From the above, we can agree that quite a few people are ready for the DeFi vs TradFi argument. So as for the discussion to not get repetitive, I'll summarize a few points on which opinions would be appreciated from your experience:

1. How should DeFi balance the need for Privacy as well as conformance?
2. Will you continue to invest if it becomes linked to KYC like the exchanges?
3. Would you like to see a consolidation or continued proliferation of projects?
4. What is your style?? You jump around or get involved deeply.

Yes, I agree there needs to be some form of paradigm shift at some point in time where Decentralized Finance starts taking over the old world. It is also a cultural matter if you think: the majority of people have never had any doubts about the economy, it was kind of set in stone and whatever the financial world provides that's all there is. Not anymore since the inception of Bitcoin.
Bitcoin was the first step towards that: I am not a big fan of DeFi on Eth (too crazy now), but the tools on the right platforms are good. I think in twenty years time there will no such thing as traditional finance anymore, as it is rapidly changing to somehow challenge what's coming from this side.

Crypto itself still heavily relies on centralized finance, as centralized exchanges host the majority of crypto market volume. This is why governments are not scared of crypto - they understand that if you regulate exchange you have successfully regulated crypto. And this is why companies like PayPal and Visa are creating crypto products - they too don't feel threatened that crypto will replace them, they see it as an opportunity to make more money.

Traditional finance is still as strong as ever and there are no signs that crypto is a threat to it. For now.

Eliminating the intermediatory is the biggest advantage of decentralized finance but it is possible to become beneficial for everyone who is in need of a loan? People who need money may not have enough money to give it as collateral as other coins but in traditional finance they can get loans for the property and if they default it then the property can be seized.

We are at the start of new way financial system used blockchain using defi. And yeah, you don't need a degree to pursue dreams like integrating blockchain system in supposed business plans. As long as one is very much informative about how this defi works.


We are totally ready as we see some improvements using these projects. As long as it is for the better, engaging ourselves into this kind of system take courage and optimistic minds. If there is an opportunity and we grab that for good purpose, success follows.

The main plus of decentralized finance is that we do not need intermediaries in the form of banks, lawyers, experts, analysts, insurers, who receive a part of the profit from each transaction and increase the cost of services.
The second important stage in this revolution should be the acceptance of cryptocurrencies as a means of payment. Now you can pay with cryptocurrencies for goods or services in some countries, but this works through intermediaries - financial and other organizations.
It is very important that the second stage comes as quickly as possible.

Traditional finance is not perfect, I don't think it was design to be perfect but it was able to get the job done for years ago and still doing so, am not looking to have a freedom of money but just looking to have a very secured system,

Those clamouring for decentralise finance have their reason for that, (to each with their desire) however, since the introduction of decentralise finance, how many individual are actually using it for their daily activities or whatever ways it is used? Do they get the satisfaction Traditional finance was not able to provide for them? I just want to know if this is being put in practice and not just in theory only.

You are right and it really is. Much depends on the person. But I also think it is necessary to add that HYIP is also necessary for this or that type of activity. Decentralized finance is in demand now, so I think that the easy integration of a new company is now on this.

In my opinion there are two factors that made traditional finance so dominant over the last 50 years, knowledge and labour. Both of these two factors were fully controlled by big banks in the past. However, due the Internet and strong computers being available for almost anybody this is not the case anymore. As long as you have access to the Internet you can get the knowledge to do your own banking. We are definitely ready for decentralized finance.

This availability has played a cruel joke with many. You really don't have to be a graduate of a prestigious university to be successful in cryptocurrency. But without knowing the question, you are unlikely to be able to become truly rich. How many times have you made mistakes and lost money? Without understanding the matter, you should not go there.