Expert Says The Future Of DeFi Will Be Shaped By Fintechs Like Revolut And Robinhood, Not Wall Street Giants Like BlackRock

Paul Frambot, CEO and founder of the lending protocol Morpho, believes the future of Decentralized Finance (DeFi) is likely to be shaped by fintech trailblazers like Robinhood and Revolut.

During an interview with DL News, Frambot shared his views on the evolution of financial infrastructure, stating that the most tech-driven companies will lead the charge. He characterized DeFi as an "artificial casino," where speculation is the main driver of yields. "The question is, how do we get from this artificial casino, bootstrapping phase to the broader message?" he said.

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Morpho, backed by venture capital firms such as a16z and Ribbit Capital, launched Optimiser in 2021 to help users maximize their yields. Despite this, the total value locked (TVL) in DeFi has dropped by 56%, intensifying competition among developers and protocols.

Frambot emphasized that major fintech companies like Robinhood, Revolut, and eToro, which have integrated cryptocurrency into their platforms, could play a crucial role in bringing DeFi to a broader audience. Robinhood, in particular, stands out in the U.S. due to its success in simplifying crypto trading for retail investors and facilitating easy access to both stocks and digital assets.

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Large traditional financial institutions like BlackRock generally cannot drive (DeFi) growth like crypto trading apps due to reasons such as regulatory constraints, their conservative investment approach, and reliance on centralized business models.

In the U.S., a handful of fintech platforms have established themselves as leaders in crypto trading by streamlining the process of buying and selling digital assets. Their user-friendly interfaces, especially for users who are already comfortable buying stocks on an iPhone, have made them attractive to a younger demographic, including millennials and Gen Z. With commission-free trading models, these platforms have attracted millions of first-time investors, contributing to significant growth in crypto transaction revenues and reflecting their ability to tap into the increasing demand for digital currencies.

Over the last year, Robinhood has aggressively expanded its crypto offerings, investing heavily in its tech infrastructure to meet increasing demand. The company has not only expanded its crypto team but has also extended its services internationally, notably with its $200 million acquisition of Bitstamp and its entry into the European Union market. These moves, along with its recent integration of Solana into its Web3 wallet, further demonstrate Robinhood's commitment to staying ahead of the curve in the crypto space.

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Industry analysts at Bernstein predict that these advancements could propel Robinhood's operating income to approximately $900 million by 2024, underscoring the impact of these strategic initiatives.

As the DeFi space continues to evolve, many fintech platforms could accelerate the adoption of decentralized solutions by making them more accessible to everyday users. Frambot anticipates that more fintechs will pursue DeFi partnerships, noting that as they aggregate financial order flow, they can eventually own the financial infrastructure themselves.

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