How Permissionless Protocols Compete With TradFi in Crypto Lending
JPMorgan Chase is exploring the launch of crypto asset-backed lending, potentially by 2026, increasing competition for decentralized finance (DeFi) lenders. DeFi offers advantages such as a simpler user experience, wider collateral options, and market-driven fee optimization. Traditional finance (TradFi) may provide lower interest rates but typically charges higher fees. Experts believe DeFi and TradFi will cater to different audiences, with DeFi's permissionless access being a key strength. DeFi is expected to focus on unique features like composability and global access rather than competing solely on interest rates. Institutional participation from banks like JPMorgan could enhance liquidity and legitimacy in the crypto space, although some view their entry as slow and reactive.
