Decentralized finance (DeFi) platforms have a major cost advantage over traditional banks when it comes to onboarding new users, according to Anton Bukov, co-founder of decentralized exchange (DEX) 1inch.
Speaking at a panel during Dutch Blockchain Week on May 22 in Amsterdam, Bukov said traditional banks spend between $100 and $300 per user to verify documents and set up accounts. Online banks, he said, spend about $20 to $30. In contrast, DeFi requires almost nothing beyond a smartphone and internet access.
“Onboarding to DeFi literally costs zero,” Bukov said. “You don’t need brick-and-mortar infrastructure or lengthy verification processes. Just connect and transact.”
Bukov said that this gives DeFi an edge over traditional financial institutions in reaching the 1.4 billion unbanked people who remain excluded from traditional finance due to high onboarding expenses.
1inch Network co-founder Anton Bukov at the Dutch Blockchain Week. Source: Cointelegraph
Reaching 1.4 billion unbanked users
“That’s why we have 1.4 billion people on the planet who are unbanked. No one’s going to invest those hundreds or tens of dollars into them because they will never return to them,” Bukov added.
Unlike traditional finance, which has high barriers to entry, Bukov said DeFi allows the unbanked to become a part of the global economy and engage in real-life transactions using stablecoins like Tether’s USDt (USDT).
With lower barriers to entry, DeFi becomes a tool for financial inclusion. Bukov said DeFi will continue to reach users who never had access to traditional banking as internet access expands globally.
“You can just get a phone, access to the internet, and you can exchange your chicken for USDT,” Bukov said, highlighting how easily DeFi enables participation in the global economy.
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DeFi allows access to global liquidity
Apart from financial inclusion, Bukov said that the real value of crypto lies in how it gives access to global liquidity. The 1inch co-founder said crypto is evolving into an independent economic zone, where hundreds of billions flow through decentralized protocols.
“Crypto isn’t just about adopting stablecoins or building national digital currencies,” Bukov said. “It’s a growing global liquidity hub.”
He said that this liquidity is dynamic and allows financial experimentation, yield strategies and cross-border capital movement.
Bukov added that countries that align their regulations to enable easier access to this global liquidity can tap into economic opportunities and cooperation. “The more countries trade with each other, the more they succeed. Crypto works the same way,” he said.
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