a16z crypto: TradFi doesn't want DeFi, but selectively uses blockchain

Odaily reported that a16z Crypto has released an analysis stating that traditional finance (TradFi) is not merging with decentralized finance (DeFi), but is instead selectively adopting blockchain technologies that meet its own needs. A long-standing narrative within the crypto industry has been that DeFi and TradFi will eventually merge, combining open liquidity with institutional distribution to form a new system superior to traditional finance. However, the reality may be different.

The core driver for traditional finance's adoption of blockchain is not the concept of decentralization, but commercial efficiency. As long as blockchain can help institutions reduce costs, improve settlement efficiency, expand distribution channels, and enhance customer relationships, they will adopt the relevant technology. “TradFi is not entering DeFi; it is utilizing the parts of DeFi that fit its own operational models and reshaping these technologies according to institutional requirements.”

a16z Crypto stated that a new category of financial infrastructure may emerge in the future—"programmable financial infrastructure" based on a blockchain foundation but optimized for institutional constraints. The blockchain technologies currently being adopted by institutions mainly include:

Atomic Settlement: Reduces counterparty risk and decreases tied-up collateral capital;

Shared Ledger: Lowers the cost of back-office reconciliation;

Programmable Money: Automates interest payments, margin management, and corporate actions;

Automated Market Makers (AMM): Being repurposed for on-chain foreign exchange and tokenized asset pricing.