Topic: Will "De-Fi" replace traditional banking in the future? - page 2. (Read 1026 times)

Many 'DeFi' tokens have been released and gone because users have known the risks and were liquidated in keeping positions in these tokens whether marginal, futures or spot. I don't agree with OP and think that DeFi will not replace anything, but will get replaced by something new like ICOs and IEOs got replaced by DeFi trend.

Good point. "De-Fi" could never replace mainstream banks if they rely on volatile cryptocurrencies to survive. Still, stablecoins provide the goodness of Fiat into the crypto/Blockchain space. But it's not enough to rival banks' prominence in the mainstream world, as they're too big to fail. As long as governments rely on central banks for the issuance of Fiat currencies around the world, "De-Fi" will only remain as an alternative than a replacement. At least, the unbanked people will be able to enjoy all of the benefits of mainstream banks without the need to verify their identities. You and only you are the sole owner of your funds in "De-Fi". That's the beauty of crypto/Blockchain tech. If Bitcoin didn't came into existence 11 years ago, none of this would've been possible.

Nonetheless, time will tell us if "De-Fi" platforms will be here to stay. As long as developers, and individuals collaborate on making "De-Fi" a better place, there should be nothing to worry about. With the ever-rising number of "De-Fi" platforms providing lending/borrowing services to crypto users, it seems to me that the industry will last for long. The hype will end for sure, paving the way for truly-legitimate "De-Fi" projects in the crypto/Blockchain space. Who knows? Maybe "De-Fi" will be able to live alongside mainstream banks in the future? Just my opinion

You don't invest on bank, you just put your money for safekeeping and you'll earn a little interest, that's different from investing in a DeFi projects where the risk is high, so the reward is also high. Banking system will continue to dominate, traditional banking as its name because people get used to it, so I don't think De-Fi will replace that traditional banking when even 1/4 of the total population does not even know crypto.

The scam defi will disappear but the legit defi has a lot of potential to replace the traditional economic system. As fa as i can see if people can get flash loan and they can also get interest from their money that already locked in the defi platform. You can't even get a lot of interest when you are putting your money into the bank or something else.


Defi gives very good interest based on the % of loan interest.

DeFi projects can distract some of the clients of traditional banks.  However, banks are still not going anywhere, since they perform many other useful functions and, most importantly, they are supported by the state.  And a significant part of citizens will traditionally trust more state banks, which are protected by the state.  DeFi projects take a lot of work and time to gain the trust of citizens.

Sadly, this will turn out to be the fate of "De-Fi" and crypto in general. Governments will eventually restrict the use of crypto, as it becomes a threat to the existing monetary system. The average individual will be forced to use traditional banks, as crypto will be deemed illegal. Still, it'll be possible to use crypto "under the radar". "De-Fi" provides many services offered by mainstream banks to the unbanked person. Behind the scenes, the crypto economy will flow as usual regardless of government restrictions worldwide. Since Fiat on/off ramps will no longer exist, people willing to get access to "De-Fi" will have to acquire cryptocurrencies "under the table". The only way to achieve this would be via P2P trading platforms or by performing an in-person exchange from Fiat to crypto or vice versa.

As far as "De-Fi" replacing mainstream banks go, I don't think they'll be able to do it is as long as governments and central banks dominate the economy. They're still too powerful to take down anytime soon. Despite Blockchain tech's recent advancements, Banks are still relevant financial institutions in the mainstream world. My guess is that Banks will adopt Blockchain technology to use it for their own benefit. I'd imagine they'd create "De-Fi" platforms of their own that are utterly centralized (becoming "Ce-Fi" as we speak). Banks have nothing to lose by creating a system they can easily manipulate and control to their hearts' content. Truly decentralized finance platforms will survive in the long run, but they'll remain as an alternative than a replacement to Banks. As long as "De-Fi" works as intended, there should be nothing to worry about. Let's focus on helping make Blockchain a better place instead of focusing on replacing banks altogether. Just my opinion

Everything that cant be controlled by the state is a threat to it, therefore, with the strong development of defi and the pushing back of the centralized banking system, the government will try to suppress this development by any means, laws will be created prohibiting the use of cryptocurrencies and similar measures. Therefore, the scaling of cryptocurrency and defi is inevitable, but I see use as a daily national currency only in countries with hyperinflation.

I doubt that it can substitute banking (traditional). The number of people that now work with cryptocurrencies and even live for crypto is huge (millions of them). But it cannot be compared with billions of the rest guys, which are so far of these things that it seems they will never use anything of this sort. Banks for them are the best decision.

We should not overlook the banks from the accounts prematurely. The market for decentralized Finance only looks so simple, clear and accessible. Let's dig deeper and see what's wrong with DeFi.
The main problem is the security of providing loans. As mentioned above, hundreds of new DeFi tokens appear on the market every day, which disappear just as quickly. Here, for example, is the Yam token, which lasted less than a day, and investors have already managed to buy a dummy coin. If you look at the root of the problem, more than half of the DeFi tokens will leave the market before the end of the year. And in the next five years, there will be less than a dozen truly worthwhile coins. By investing in DeFi tokens today, you run the risk of running into dummy coins and losing your savings.

That's certainly true, mate. The fact that "De-Fi" has no middleman and it's anonymous, scares away many people in the mainstream world. After all, the average person is looking for something that's backed by a trusted entity. It's this reason why "De-Fi" won't be able to replace traditional banks anytime soon. At least, the industry will find it's own way among the unbanked people using crypto in the mainstream world. You can leverage the benefits of both banks and "De-Fi" in order to maintain a steady financial life for years to come. I believe that "De-Fi" will prove to be a nice alternative to banks in times of need. With attractive interest rates available on "De-Fi" platforms, who can't resist spending money on them?

As long as "De-Fi's" legitimate use cases are expanded in the mainstream world, the industry will be here to stay for many generations. In their early days, expect a lot of hype and scams going all over the place. But wait a few more years, and you'll see a mature industry that's supported by institutional investors and serious traders alike. Ultimately, banks will prevail as they dominate the world's economy. And there may be nothing we can do to stop them. At least, crypto/Blockchain tech will be here to stay for many generations. Just my opinion

Most governments will definitely limit this, moreover, DeFi is not something the government can fully control. As you said, this will only be an alternative, not a substitute. Although the system is better, there are some people who doubt it because it is mostly anonymous, so they think it is less secure.
And trust in a system of burdens with government oversight is considered safer. Well, this is just a matter of taste, the important thing is we can use it wisely and take advantage of it as possible.

That's certainly true, mate. Most people are wary of trying something new. They believe that what's new is very risky to them. But sometimes, we need to take risks in order to explore new opportunities that only comes in a lifetime. "De-Fi" is a great opportunity to enjoy all the benefits of traditional banking without banks. The unbanked will find "De-Fi" to be extremely useful in their daily life. While I have to admit that "De-Fi" is extremely hyped right now, it still has the potential to take the world by storm. During this hype phase, it's expected that scams would appear every once in a while. But as time goes by, people will be able to difference the good projects vs the bad ones. The industry just needs a little more time to mature. Until "De-Fi" gains performance comparable to that of traditional banks (VISA, Mastercard, PayPal, etc.), it won't be able to replace banking anytime soon.

Even after "De-Fi" matures, banks will still be relevant in the future as governments depend on them for the management of their own national currencies (Fiat). As long as banks dominate the economy, the won't be going anywhere. "De-Fi" will grow alongside banks for the foreseeable future. Needless to say, the crypto/Blockchain space will be able to survive with or without "De-Fi". If the concept of borrowing/lending via smart contracts powered by Blockchain technology works, then most "De-Fi" platforms will be here to stay. Otherwise, crypto will move on as usual serving its purpose of providing an alternative to the existing monetary system. Just my thoughts

DeFi is a barrier-free pathway for financial institutions to the widest range of financial inclusion.
DeFi is real proof of blockchain and smart contract technology. However, because it is still in its very early form, misuse of program code is possible,
which can have fatal consequences and trigger public distrust.
This means that there are still many big challenges facing DeFi if it wants to replace traditional banking in the future.

Traditional banking offers offline and online transactions, they are way better than De-Fi in the eyes of many people, plus they are back by the government, that is why we have a central bank, an agency to oversee the banking industry. De-Fi is good but it's too early to tell and the word "replace" is quite ambitious for a new platform, it's like taking down the banking industry.

Nothing will replace banking. They will evolv to be modern enough but will never be dead

How many times crypto related "things" tried to be a part of banking sector? Exchanges that issue cards, XRP, everyone that promise cheap and quick transactions. All these stacking things that tried to act as a bank investment plans and many others. Why someone think that DeFi will replace banks? Lets wait first for cryptocurrency mass adoption, and only then talk about replacement.

DEFI projects will not be able to replace banks because they are risky and not strictly regulated by law.
Also, DEFI is not stable in liquidity, people invest for profit, and that accidentally destroys projects.
DEFI will be a trend in the future, but it needs stability to play its role well. I find the bank more stable and safer than DEFI.

In addition to the habit of using traditional banking services, most people do not have the skills to use cryptocurrencies. This sector of DeFi was created specifically for those who appreciate the possibility of anonymous use of financial services and understand its differences from the services provided by banks.

There will be always people, who never trust any new technologies and payment systems. DeFi is not known to the majority of people. I doubt that it will ever replace traditional stuff. It will make the life of people, who deal with it, simpler, and probably, more comfortable (for them).

I don't think DeFi platforms would replace traditional banking in the future because the government owns and regulates the banks, and it has been existed years ago. But DeFi platforms are good as an alternative of the traditional financial system to keep our assets safe from further collapse that is proven this year of 2020 that it doesn't have been affected in the pandemic of the corona virus.