ARK Invest has publicly challenged a16z Crypto’s view that traditional finance needs blockchain technology but not necessarily DeFi. Lorenzo Valente, ARK Invest’s head of research, argued that financial institutions are more likely to build on open DeFi infrastructure than on closed or private blockchain systems. He said public chains have already shown stronger advantages than private-chain models, pointing to the growth of tokenized assets on open networks such as Ethereum as evidence of better network effects and greater room to scale.
Valente also said the builders of next-generation financial infrastructure may not be incumbent financial institutions, but crypto-native companies such as Circle and Coinbase. That stands in contrast to a16z Crypto’s position that banks and asset managers are selectively adopting blockchain features that fit existing compliance, governance, and operational requirements rather than embracing DeFi itself.
Sentora co-founder Jesus Rodriguez also disputed the a16z view. He said financial institutions may ultimately adopt DeFi as the base layer, while adding compliance, custody, and enterprise-grade control mechanisms on top. The debate has intensified as RWA tokenization, onchain settlement, and institution-focused financial applications continue to expand.
ARK Invest has pushed back against a16z Crypto’s argument that traditional finance needs blockchain technology, not DeFi, with ARK Invest head of research Lorenzo Valente saying financial institutions may be more likely to build on open DeFi infrastructure in the future.
Valente said public blockchains have already shown advantages over private blockchain approaches. In his view, the growth of tokenized assets on open networks such as Ethereum points to stronger network effects and greater scalability on public chains.
ARK Invest and a16z differ on what institutions will adopt
Valente said the builders of next-generation financial infrastructure may not be traditional financial institutions themselves, but crypto-native companies such as Circle and Coinbase.
a16z Crypto had previously laid out a different position, arguing that traditional financial institutions are not truly embracing DeFi. Instead, they are selectively adopting blockchain technology that fits existing compliance, governance, and operational requirements.
Under that view, banks and asset management firms will build “programmable financial infrastructure” by borrowing core blockchain capabilities such as tokenization and atomic settlement, while still keeping permissioned management structures and institutional control.
Sentora co-founder also disputes the thesis
Sentora co-founder Jesus Rodriguez also objected to that argument. He said financial institutions may ultimately use DeFi infrastructure at the base layer, then add compliance, custody, and enterprise-grade control mechanisms on top.
As RWA tokenization, onchain settlement, and institution-grade financial applications develop rapidly, the debate over whether open DeFi architecture or permissioned blockchain systems will take the leading role is heating up.
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