Topic: The outcome of merging traditional finance and decentralised finance. - page 2. (Read 405 times)

That is a fair point. People on the internet immediately believe that Bitcoin and other crypto currencies being immediately included in traditional banks or tools in the United States or in the European Union is something good. But someone aware of the main objective of Bitcoin is (decentralization) would say that those adaptations of Bitcoin to the markets are rather efforts to centralized the use of Bitcoin, so people interested in Bitcoin and other major cryptocurrencies won't bother to have a non custodial wallet, and only keep their funds in those centralized instruments.
For example, there have been some banks which have announced to start to offer Bitcoin services to their clients with a high tolerante to volatility. Those potential clients would have had a decentralized wallet on their own eventually, if they were truly interested in Bitcoin. Now they have the apparent comfortability to have their BTC in the same bank account their FIAT is.
The apparent sense of legitimacy which is granted to Bitcoin by those centralized institutions comes at the cost of centralizing the holding of satoshis and the value of them, it is exactly the opposite on what the mission of Alts and BTC is, in my opinion.

"De-Fi" apps, on the other hand, don't have any Fiat on/off ramps. They only use crypto for everything from borrowing to lending and staking. Those that have a Fiat on/off ramp are not truly-decentralized. Why make matters worse by forcing developers to modify existing "De-Fi" platforms to abide with KYC/AML laws? If successful, we would have something called "CeDeFi". It will move crypto away from its original principles. Is that the future we want for the industry?   

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1. Financial Inclusion: It can provide access to financial services for the unbanked and underbanked.

What potential outcomes and difficulties could arise from merging traditional and decentralized finance  using public blockchain technology as the underlying infrastructure?
 
Here are some of the possible implications or outcome when traditional finance and decentralised finance are merged together.

2. Efficiency and Transparency: Blockchain enables faster transactions and reduces fraud through transparent records.
3. Regulatory Challenges: Balancing decentralized finance with existing regulations requires collaboration between stakeholders and regulators.
4. Scalability and Performance: Addressing limitations in public blockchains is necessary to handle increased transaction volume.
5. Security and Privacy: Robust security measures are needed to protect funds and data while finding a balance between transparency and privacy.

6. Interoperability and Standardization: Common standards are required for seamless integration across different platforms and systems.
7. Education and Adoption: Educating users, institutions, and regulators is crucial for successful implementation.

The above mentioned are some of the possible outcomes I could think of but for this to be achieved, I believe that institutional grade products must be created and by institutional- grade, I mean products that are built with security and transparency as it's major principle and not limited to being regulatory compliant.  Are there any projects currently championing this cause?

OP, this idea will not scale through because decentralization is core value and purpose of crypto, so that no one will be full in charge or control of the system, so if the two monetary system is been merged, don't you think that purpose for the creation of crypto is being conquered, it will be better for system to function separately in other not to give room for government interference or control of crypto, let's continue to exchange our crypto to our traditional currency which is obtainable anything apart that is centralization which will not be a good part for crypto.

OP, this idea will not scale through because decentralization is core value and purpose of crypto, so that no one will be full in charge or control of the system, so if the two monetary system is been merged, don't you think that purpose for the creation of crypto is being conquered, it will be better for system to function separately in other not to give room for government interference or control of crypto, let's continue to exchange our crypto to our traditional currency which is obtainable anything apart that is centralization which will not be a good part for crypto.

Decentralized finance needs to be regulated by the government to be effective. Therefore, although the restrictions related to it will not be as stringent as those of banks, it will be in the area of microfinance for the average and in the range of 10k USD, it can be integrated with central finance, but unfortunately, governments may not like the idea of being there. Greater freedom to circulate money, and therefore you may not agree to this financing, especially if the profits and control of the banks begin to decrease, but the integration between them may give better results for everyone looking for financing.

The reason I brought up the need for platforms with strong security and transparency is because of the "security concerns." If we want this merger to be successful, developers should focus on developing platforms that meet these criteria. Have you heard of ONDO? I'm still observing it, but It's one platform that could potentially fulfill these requirements, and if it lives up to expectations, it could be the key to achieving a seamless integration of traditional finance (trad-fi) and decentralized finance (defi).

Would not decentralized finance lose its core value by merging with traditional finance? Even though some people might be into this idea, i know for a fact that a lot of people would not feel comfortable participating with a supposedly decentralized finance but authorities have access to the system it might also just be too confusing to people decentralized finance is already confusing to others as it is but to merge centralized finance with it it begs the question of why not just make it entirely different or separate? Both has pros and cons but merging it would not attract more people, i believe

More or less, the crypto market is already controlled by the governments indirectly by heavy scrutinizing via centralized exchanges, linking identity via KYC documents, and imposing heavy taxes but at least the nature of cryptocurrency remains the same which is decentralized but with so called merging, combining we also let go of the decentralization as well which has no positive for the crypto's future.

I think crypto is already starting to move away from its core principles. The vast majority of developers want to please the regulators and "Wall Street" just to avoid getting into trouble. Believe me, if Satoshi did that in the first place, Bitcoin would've been centralized already. I sure hope truly-decentralized projects stay true to their principles of freedom and privacy. As long as the community fights back, centralizing powers won't be able to stop the revolution. Just my thoughts

What potential outcomes and difficulties could arise from merging traditional and decentralized finance  using public blockchain technology as the underlying infrastructure?
 
Here are some of the possible implications or outcome when traditional finance and decentralised finance are merged together.

1. Financial Inclusion: It can provide access to financial services for the unbanked and underbanked.
2. Efficiency and Transparency: Blockchain enables faster transactions and reduces fraud through transparent records.
3. Regulatory Challenges: Balancing decentralized finance with existing regulations requires collaboration between stakeholders and regulators.
4. Scalability and Performance: Addressing limitations in public blockchains is necessary to handle increased transaction volume.
5. Security and Privacy: Robust security measures are needed to protect funds and data while finding a balance between transparency and privacy.
6. Interoperability and Standardization: Common standards are required for seamless integration across different platforms and systems.
7. Education and Adoption: Educating users, institutions, and regulators is crucial for successful implementation.

The above mentioned are some of the possible outcomes I could think of but for this to be achieved, I believe that institutional grade products must be created and by institutional- grade, I mean products that are built with security and transparency as it's major principle and not limited to being regulatory compliant.  Are there any projects currently championing this cause?

DeFi platforms have security concerns that is why you can see tons of defi platforms hacks in all these year from this thread: DeFi hacks [history]

Traditional finance institutions are the direct competitors for defi so I don't know how both can be merged.

DeFi platforms have security concerns that is why you can see tons of defi platforms hacks in all these year from this thread: DeFi hacks [history]

Traditional finance institutions are the direct competitors for defi so I don't know how both can be merged.

I am not following much of the new projects lately, but I will take a look into the project you mentioned and see what's new in it from the existing projects.

The problem with traditional finance is, profit driven business but defi is completely community driven model so merging both can be a hell lot of a job and with highest security possible it gets more difficult.

The reason I brought up the need for platforms with strong security and transparency is because of the "security concerns." If we want this merger to be successful, developers should focus on developing platforms that meet these criteria. Have you heard of ONDO? I'm still observing it, but It's one platform that could potentially fulfill these requirements, and if it lives up to expectations, it could be the key to achieving a seamless integration of traditional finance (trad-fi) and decentralized finance (defi).

DeFi platforms have security concerns that is why you can see tons of defi platforms hacks in all these year from this thread: DeFi hacks [history]

Traditional finance institutions are the direct competitors for defi so I don't know how both can be merged.