ARK Invest Counters a16z's View on Traditional Finance Adopting Blockchain Instead of DeFi: Institutions Will Increasingly Rely on DeFi Infrastructure

BlockBeats News, July 16th, ARK Invest Research Director Lorenzo Valente published a post refuting a16z crypto's view on "Traditional Finance Will Adopt Blockchain, Not DeFi," arguing that institutions will increasingly rely on DeFi infrastructure in the future.

Valente stated that public chains have been ahead of private chain projects in practical development, with the growth of tokenized assets on open networks like Ethereum being a case in point. He also believes that crypto-native companies such as Circle and Coinbase are better positioned than traditional financial institutions to build the next generation of financial infrastructure.

a16z crypto previously stated that banks and asset management institutions will not directly adopt DeFi, but will instead opt for blockchain technology that meets existing compliance, governance, and operational requirements, including functionalities such as tokenization and atomic settlement, while continuing to maintain permissioned access and institutional control.

Jesus Rodriguez, co-founder of Sentora, also disagreed with a16z's view, suggesting that institutions may adopt DeFi's underlying infrastructure and layer on top of it compliance, custody, and other enterprise-level controls.