DeFi vs. Traditional Finance: A Comparative Analysis
DeFi vs. Traditional Finance: A Comparative Analysis. In the rapidly evolving financial landscape, the emergence of Decentralized Finance (DeFi) presents a paradigm shift from traditional monetary systems. This comparative Analysis explores the core differences, advantages, and challenges of DeFi and traditional finance. Traditional Finance Traditional finance, also known as centralized finance, operates through established institutions such as banks, credit unions, and stock exchanges. Here are some key characteristics: Centralized Control Financial transactions and operations are controlled by centralized institutions, ensuring regulatory compliance and oversight. Intermediaries Transactions often involve multiple intermediaries, including banks, brokers, and clearinghouses, which can increase costs and processing times. Accessibility Access to financial services can be limited by geographical location, socio-economic status, and regulatory frameworks, often excluding a significa...