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DeFi will win because it’s better and more transparent than banks – Investor Mike Novogratz

DeFi

TL; DR Breakdown

  • Investor Mike Novogratz bashes US politician for trying to stifle cryptos
  • Banks have made over $12 billion in overdraft fees in the recent past
  • Lack of transparency in banks has caused a mortgage crisis

The battle between DeFi and banks is heating up, and supporters on both sides are getting more aggressive. Banks are startled by the rise of crypto-based Decentralized Finance that seem to have challenged their business models to a point of existential risk. As expected, governments are on the side of the banks, but the people are for DeFi.

In a recent tweet, crypto investor Mike Novogratz sought to define the true image of banks as compared to the new DeFi revolution.

The dark side of banks

First off, banks haven’t been very transparent in their dealings, a fact that has contributed greatly to the ballooning mortgage crisis. These traditional institutions are also very expensive to use as compared to the almost negligible transaction fees charged on crypto networks.

According to Mike, banks have made fortunes from ATM fees, $12 billion in overdraft fees, and checking account fees. All these expenses hurt an individual’s income and purchasing power as opposed to crypto transactions that save money. Mike posted a tweet rebuking US Senator Elizabeth Warren for trying to go after cryptos while ignoring the vices perpetrated by banks.

The case for DeFi

Unlike banks, cryptos are pretty easy and cheap to deal with. Atomic settlements are faster and more convenient, and people have direct access and control of their digital assets. Decentralized Finance is also transparent and has more composability. The same can’t be said for banks. Mike opines that politicians need to be educated on the advantages of DeFi and cryptos before they lash out blindly like Senator Warren is doing.

KYC issues to be ironed out soon

One thing that has held back DeFi protocols from ultimate success is the regulatory issues regarding Know-Your-Customer (KYC) policies. Mike is confident that this will be solved soon as the crypto world gets more popular and proper industry regulations are put in place.

Dennis Mugambi

Dennis Mugambi

Dennis is a content writer with a deep understanding of the blockchain domain and cryptocurrency field. He infuses cold data with flair to make technology and finances mind-blowing. His reports both fascinate and awaken the readers.

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