Can DeFi Ever Compete With Wall Street?

The conventional wisdom says blockchains can't keep up with Wall Street's high-frequency machines involving microsecond trades, co-location and ultra-low latency networks. That's true, and getting into that arms race is likely to be a losing battle. But "never match" doesn't equal "never compete." What's changing right now is that DeFi is getting close enough in throughput and institutional trust. 

High-frequency trading and traditional finance will probably always hold an edge when it comes to shaving off a few nanoseconds. But increasingly, institutions are asking whether a system settles reliably, if an execution be trusted and whether trading, tokenization, and treasury operations can be done transparently, with auditability and regulatory safety?

Recent developments suggest DeFi is starting to answer yes.

The throughput breakthroughs

With over $600M invested by firms like Upexi and DeFi Developments Corp since 2025 in Solana infrastructure, it makes the case for Wall Street-like experience being closer than it's even been. This is particularly true for its network upgrades with clients like Firedancer, blockspace improvements and RPS enhancements. These upgrades are giving milliseconds of finality with high throughput and dramatically lowered costs. For many institutional use cases, tokenized stocks, corporate treasuries, stablecoin operations and portfolio rebalancing, this is "fast enough."

But that's no longer a solo story. EVM-based chains, long criticized for sluggishness, are evolving fast. Layer 2s on Ethereum, parallelized execution on Monad, and modular rollup frameworks are showing that speed and programmability don't have to be mutually exclusive. For institutions that care more about fast enough than fastest on earth, these upgrades are crossing an important threshold. Tokenized stocks, stablecoin flows, or automated portfolio balancing need predictable, affordable finality.

Institutional adoption is happening 

The assumption used to be that DeFi is for speculators and degens, but that story is changing. Analyst reports are already flagging ETF filings tied to blockchain rails, while major firms explore tokenizing shares or balance sheets. Whether it's corporate treasuries experimenting with Ethereum-based stablecoin flows or firms piloting tokenized debt issuance, the shift is clear, real finance is beginning to touch real chains. The trust, regulatory rails and the institutions' real use cases are coming into focus.

What Wall Street still owns

Even with throughput and institutional adoption rising, DeFi needs to get certain things right if it wants to be genuinely competitive. It cannot have surprise downtimes, failures during spikes,or sudden gas and fee explosions. If a protocol can go dark when usage is high, institutions will stay wary. With regards to execution quality, including MEV (maximal extractable value) or front-running issues, these are the things TradFi has optimized over many decades. DeFi protocols must deliver comparable execution consistency.

It's equally important to be able to prove provenance, adhere to financial reporting rules and offer custody in forms that satisfy auditability. Recent examples (tokenized equities, regulated wallets with DeFi access) show this is being actively built.

If you're an institutional trader or treasury manager, unexpected gas fees or variable validator costs kill ROI. It's why cost predictability is something DeFi needs to pay much closer attention to. DeFi must also be able to plug into the broader financial ecosystem rather than hang in isolation, offering the ability to mix and match custody, tokenization, lending and yield. 

It's not about beating Wall Street, but changing the Game

DeFi does not need to beat Wall Street at latency.  What it can do, and what it seems to be doing already, is offering a different package combining "good enough" speed, higher transparency, global access, programmable money and fewer intermediaries.

Once an institution doesn't need microsecond resolution to get its job done, but does need trustworthy execution, audited systems, fractional custody, tokenization, access to global liquidity, maybe 24/7 trading across jurisdictions, the appeal of DeFi becomes very real.

Why now?

By 2025, the technical rails have matured. Solana's client diversity and throughput gains are real, but so are the advances across the EVM universe with rollups scaling horizontally, zk proofs hardening privacy and compliance, and new execution layers like Monad pushing parallelized EVM performance while resisting MEV capture. Meanwhile, macro volatility and low yields in legacy assets are forcing institutions to look elsewhere.

DeFi won't "win" the latency race, and that was never the point. The point is reliability, and new structures that can coexist with and sometimes outperform traditional rails. If this year is a guide, DeFi is no longer chasing Wall Street's sprint but carving its own track that institutions are beginning to notice.

Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.