What does Sid Powell mean by 'DeFi is dead'?

Sid Powell means DeFi will evolve and integrate into traditional finance, becoming the underlying infrastructure rather than a separate entity.

When will institutions stop distinguishing between DeFi and TradFi?

Powell predicts this integration will happen within a couple of years, with all capital markets activity eventually moving onchain.

Which institutions will use the new onchain financial system?

Sovereign wealth funds, pension managers, insurers, and large asset managers are expected to be primary users of the new onchain system.

Home / Business and Economy / DeFi is Dead? Powell Predicts Onchain Finance Dominance

DeFi is Dead? Powell Predicts Onchain Finance Dominance

23 Dec

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Summary

DeFi's evolution means integration, not extinction, in finance.
Institutions will soon view DeFi and TradFi as one market.
Onchain capital markets activity is projected to rise significantly.

DeFi is Dead? Powell Predicts Onchain Finance Dominance

Maple Finance CEO Sid Powell controversially suggests that "DeFi is dead," interpreting this not as an end but as a profound integration with traditional financial markets. He forecasts that within a few years, institutions will cease to distinguish between decentralized and traditional finance, with all capital markets activities eventually migrating onchain.

Powell likens this transformation to the internet's revolutionizing e-commerce, where onchain finance will become the next technological layer for global markets. He anticipates an increasing adoption of crypto-native structures in debt capital markets, such as Bitcoin-backed mortgages and securitized crypto loans. This pivot is expected to be embraced by sovereign wealth funds, pension managers, and large asset managers controlling global financial markets.

Signs of this impending shift are already apparent, particularly with stablecoins. Following legislative developments, major financial institutions like PayPal, Société Générale, and Fiserv are adopting or exploring stablecoin usage. This growing interest from Wall Street giants signals a broader trend towards embracing blockchain technology as the future infrastructure for financial transactions, necessitating a robust regulatory framework.