In an interview with Cointelegraph at the World Economic Forum (WEF) in Davos, Switzerland, Emin Gun Sirer, the co-founder and CEO of Ava Labs, spoke on DeFi’s role in TradFi ecosystems and what users can expect in a future where both are on center stage.
Sirer stressed that the purpose of DeFi is not to attack or be an enemy to TradFi, but rather complement it, at least initially.
“I don’t think DeFi is meant to attack TradFi. DeFi is supposed to complement TradFi, at least initially,” argues @avalabsofficial‘s @el33th4xor when asked by Cointelegraph’s reporter @gazza_jenks at the @wef in Davos.
— Cointelegraph (@Cointelegraph) January 17, 2023
The AVA Labs co-founder pointed out that DeFi can offer services to people that TradFi doesn’t, especially when it comes to democratized access to financial services and platforms.
The AVA Labs co-founder believes that the two will come together. This is a developing mindset in the decentralized space, as the first-generation systems came as an alternative or opposition to TradFi.
According to Sirer, this is because initially, these two financial worlds had different values, which are now merging.
“Now TradFi is understanding that, yes, [DeFi] has the transparency that we clamor, [they] can do safety tests on their systems because of the audit-ability of the systems they built, that we cannot do.”
A recent statement from an executive at Ripple also revealed an expectant attitude towards more TradFi adoption in 2023. This is also something industry insiders are looking at in terms of acquisitions of crypto companies by larger, legacy companies in the TradFi space.
From the DeFi side, Sirer says that those who will come out as visionaries are going to be the chains that absorb this growth.
After the FTX scandal, many outside the industry became even larger skeptics of what decentralized financial technologies can offer.
Sirer says that post-FTX, everyone needs to be reminded that this industry is here to stay, as well as this new asset class.
“There are many of us who dedicated our careers to scientific development in the blockchain space. We undertook all of the steps necessary to solve the scalability problems to solve the governance problems, the compliance problems that the space faced.”
DeFi is even being reimagined through an institutional lens, to benefit larger corporations in mainstream industries, including TradFi banks.