ARK pushes back against a16z's ‘TradFi wants blockchain, not DeFi' claim

ARK Invest's director of research pushed back against a16z crypto's recent thesis that traditional finance will adopt permissioned blockchain infrastructure rather than decentralized finance. Institutions will increasingly rely on DeFi rails, not private ledgers, the researcher argued.

a16z's position, as outlined in a recent note, holds that TradFi firms will prefer permissioned blockchains for control, compliance, and counterparty privacy. ARK's counter: the cost and liquidity advantages of open DeFi protocols will eventually outweigh those concerns. The researcher pointed to the steady migration of real-world assets onto public blockchains and the growing use of DeFi lending pools by institutional borrowers.

The disagreement mirrors the wider tension between the "blockchain, not bitcoin" crowd and the crypto-native camp. ARK's view suggests the permissioned-versus-permissionless question is a timeline question, not a binary choice. In the near term, many institutions will use both. Over time, the researcher argued, the network effects of open DeFi will dominate.

The debate echoes real-world moves such as PayPal's PYUSD on Polygon.