As traditional finance (TradFi) explores the crypto lending market, DeFi lending protocols are being assessed for their competitive edge. JPMorgan Chase has shown interest in offering crypto loans, potentially by 2026. 1inch co-founder Sergej Kunz highlighted the simplicity of DeFi platforms, which support more collateral options and market-driven fee optimization. Gadi Chait from Xapo Bank noted that while TradFi could offer lower interest rates for crypto-collateralized loans, DeFi's typically lower fees often offset these differences. The open nature of DeFi, allowing permissionless access without strict controls, remains a distinctive advantage. George Mandres emphasized the specialization of DeFi in long-tail assets, suggesting it may need separate tracks for retail and institutional lending. The potential entry of JPMorgan is seen as a positive development that could enhance liquidity and legitimacy in the crypto space. However, some experts caution that TradFi may be slow to adapt, merely following trends without true innovation.

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