The DeFi mullet — Fintech needs DeFi in the back
Fintech companies face limitations from traditional financial infrastructure, which is slow, costly, and inflexible. Decentralized finance (DeFi) offers a fast, cost-effective, and interoperable alternative but lacks mainstream accessibility. The proposed solution is to merge fintech's user experience with DeFi's efficient backend, termed the "DeFi Mullet." DeFi has demonstrated reliability, managing billions in loans securely. Institutions are increasingly adopting onchain solutions, with significant moves from companies like BlackRock and Stripe. The evolution of products such as crypto-backed loans and onchain savings accounts is expected, maintaining a familiar user experience through smart wallets. Concerns about decentralization erosion due to regulatory compliance are acknowledged, but it is argued that regulating user-facing applications rather than underlying protocols is more effective. The shift towards integrating DeFi into fintech is seen as inevitable for maintaining relevance in the financial landscape.
