DeFi vs Traditional Banks: The Battle for the Global Economy with Zero Entry Costs

• DeFi offers near-zero onboarding costs, making it more accessible than traditional finance.
• Traditional finance’s high entry barriers exclude 1.4B people, while DeFi promotes inclusion.
• By enabling global liquidity, DeFi creates new economic opportunities for users.

Anton Bukov, co-founder of 1inch, a decentralized exchange, has explained that operating procedures in DeFi are much cheaper than those that traditional banks use. During Dutch Blockchain Week in Amsterdam, Bukov explained that verifying documents and setting up accounts for a user at a traditional bank can cost $100-300. In comparison, online banks incur only $20-30 per user. Alternatively, using decentralized financial platforms is as easy as having a smartphone and an internet connection.

According to Bukov, Defi can be used with little or no upfront cost. Since no equipment is involved and the system doesn’t require extended verification, transactions are convenient. Anyone who has internet can use it to send and receive payments easily. With its simplicity and low-cost structure, DeFi can serve more people than traditional banking because it can reach 1.4 billion unbanked people.

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