Understanding The Dividing Line Between TradFi and DeFi

Decentralized Finance, or DeFi for short, has gained quite the reputation in the crypto world, making TradFi (Traditional Finance) seem more like an old rotary phone compared to a sleek smartphone. Let’s dive into the nitty-gritty and explore their key differences.

Where Trust Comes From

First up, let’s talk trust. In the DeFi world, good ol’ blockchain (be it Ethereum or its cousins) is the omnipresent overseer, handling everything with the impartiality of an over-caffeinated librarian. Contrast that with TradFi, where public governance takes the wheel, steering the vehicle with laws, regulations, and occasional detours. After recent events, though, you might be left scratching your head about how much faith you can put in those shiny structures.

The Allure of Openness

One of the primary reasons DeFi has captured the public’s imagination is its commitment to transparency. Imagine a kitchen where you can peek through the glass into the cooking process — that’s DeFi! Anyone sporting a bit of coding skill can whip up financial products on the blockchain buffet. On the flip side, TradFi is more like a restaurant with a