“Traditional money of any kind is abundant, very cheap, and accessing DeFi protocols to finance real world assets doesn’t create any shortcut, but rather adds another layer of complexity to the value flow described above.”
Spot on. In the long run, the situation might of course flip around and securitising off chain will be the more complex process. Either way, in the end what matters for the product are the originator’s underwriting capabilities — DeFi is just a source of capital and doesn’t change that. If it gets cheap and abundant enough it may become a meaningful alternative to traditional sources, but as you point out it takes expertise to finance those deals. Tokenising in principle makes the product accessible to a wider investor base, but as seen with P2P lending that’s not necessarily an advantage.
“Traditional money of any kind is abundant, very cheap, and accessing DeFi protocols to finance real world assets doesn’t create any shortcut, but rather adds another layer of complexity to the value flow described above.”
Spot on. In the long run, the situation might of course flip around and securitising off chain will be the more complex process. Either way, in the end what matters for the product are the originator’s underwriting capabilities — DeFi is just a source of capital and doesn’t change that. If it gets cheap and abundant enough it may become a meaningful alternative to traditional sources, but as you point out it takes expertise to finance those deals. Tokenising in principle makes the product accessible to a wider investor base, but as seen with P2P lending that’s not necessarily an advantage.