TradFi vs DeFi: ARK challenges a16z as tokenized finance grows on public chains

ARK Invest research director Lorenzo Valente challenged a16z Crypto’s “TradFi doesn’t want DeFi” thesis, arguing that TradFi vs DeFi is not a permissioned-only story. a16z says banks and asset managers will use blockchains for lower costs and better settlement while keeping compliance, governance, and operations centralized. Valente counters that institutional activity is already expanding on public blockchains. He points to rising tokenized finance, with total tokenized real-world assets reported above $29B by April 2026 and tokenized US Treasuries around $13.4B, including deployment on Ethereum. Standard Chartered projects stablecoins and tokenized assets could reach $4T by end-2028, with mature DeFi protocols likely capturing much of the activity. The article highlights potential DeFi beneficiaries such as Aave, Compound, and Morpho, and notes BlackRock’s BUIDL fund using on-chain markets for collateral. Still, the TradFi vs DeFi split may be hybrid: institutions can use public chains while restricting wallets, custody, and transfers. Permissioned and semi-controlled alternatives (e.g., Canton Network) also compete. For traders, this is a narrative on infrastructure rails rather than an immediate protocol change. Near-term price impact is likely limited unless follow-through shows up in stablecoin issuance, tokenized-asset flows, and DeFi liquidity.