How protocols compete without permission with Trafi to lend to encryption star-news.press/wp

Also, traditional financing financing (tradfi) is the encryption lending market, members of society explained how to lend it to decentralized financing (Defi) competition with the prevailing financial institutions to the table.

On Tuesday, it was reported that JPMorgan Chase, the largest bank in the United States, explores lending directly against encryption assets such as Bitcoin (BTC) and ETHER (ETH), according to the Financial Times. An unidentified source said that the bank may launch the offer as soon as 2026, although the plan is still in its early stages.

With the main Tradfi player looking to the encryption lending market, the pressure on the Defi lenders to remain competing. However, co -founder (1) Sergey Kons told Cointelegraph that Crypto’s lending in Defi has an undeniable advantages on traditional financial institutions.

KUNZ is highlighted by user experience, broader side support and improving the markets driven by the market as some Defi’s advantages on Trafi.

Defi supports more side options and better fees

“Defi lending platforms provides a simpler and more clear user experience,” Konz told Cointelegraph. “Unlike tradfi counterparts, they support a wide range of guarantee options, and their liquidation usually occurs later on those in Trafi.”

He added that Trafi services usually receive higher fees, while Defi platforms may benefit from the improvement of market dependent fees.

Gadi Chait, head of investment at Xapo Bank, agreed that Defi and Traffi are likely to serve a different audience, although interest rates may become a competitive point.

He told Chait Cointelegraph that although Trafi giants may offer encrypted loans with lower prices, the rates are not expected to vary significantly.

“It is important to remember that Defi usually has fewer fees, which helps to compensate for any differences in price,” Chit told CointeleGraph, adding that Defi and Tradfi usually serve different markets.

Chit also said that although the JPMorgan account base is important, it only represents a limited part of the total -based market:

“The coding area is wide, and there is room for several players with a different strength.”

The arrival remains without the power of Defi

While the entry of the Tradfi encryption, access without permission is still a specific advantage for Defi, according to ABDUL RAFAY GADIT, co -founder and financial manager of the social investment platform for Zignaly.

“While the main tradfi institutions may currently provide fewer lending rates, they do so within tightly governed action frameworks,”

In contrast, the Defi design allows anyone with an internet connection and a portfolio to participate, without any central papers or approval.

Jadit said that Defi should not try to compete for interest rates alone, but should depend on what makes it unique. This includes the cost, control and global access, without friction.

George Mandres, the chief trader on the XBTO digital assets platform, said that specialization is important.

Mandres told Cointelegraph that traditional lenders are likely to dominate the organized -regulating lending markets such as BTC, ETH and Stablecoins.

However, the trader said that the DEFI edge lies in its ability to provide access to long assets and cases of use that are unlikely to be supported by large institutions:

“In the end, Defi may need to develop into two tracks. One for retail, one for institutions.”

Related to: Bitcoin-backed loans The next step-CEO of Xapo Bank

Jpmorgan entry “positive net” for encryption

Michael Carbonara, co -founder and CEO of Ibanera, a platform designed to fill traditional financing and Web3 infrastructure, told CointeleGraph that the possible entry of JPMorgan to coding can be only “positive” for the encryption space.

Carbonara said that the institutional participation tends to bring liquidity and infrastructure better to the emerging markets. It may now be expanded to the area of digital assets.

“It is tantamount to verifying the validity of the wider digital assets,” Carbonara said, stressing that this step indicates Crypto’s move to a more mature financial sector.

He said that these developments indicate that traditional financial players are no longer negative, but active participants in the Web3 economy.

“Although it may raise the regulatory and competitive pressure of the original encoded players, the increasing legitimacy and the impact of the network brought by these participants tend to benefit from the ecosystems as a whole,” added Carbonara.

While JPMorgan is looking to lend to encryption it may be an interesting development, Tom Spiller, a legal encoding expert at Rosenblatt Law, told Cointelgraph it is “unimportant.”

Spiller said that JPMorgan is only “played with a business line that has already years of history.” He also said that the potential production line that will take place in the next year means that they are still vulnerable to grazing – only because others do so – which led to the mortgage crisis.

“They are very slow to adapt to changing times,” Spiller told Cointelegraph.

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