Woofun AI notes that ARK Invest’s Head of Research, Lorenzo Valente, publicly refuted a16z Crypto’s assertion that traditional finance requires blockchain rather than DeFi. Valente argued that financial institutions are more likely to utilize open DeFi infrastructure, citing the demonstrated advantages of public blockchains over private solutions. He highlighted that the growth of tokenized assets on networks like Ethereum underscores the stronger network effects and scalability of public chains.

Valente suggested that crypto-native enterprises such as Circle and Coinbase may build the next generation of financial infrastructure, rather than traditional institutions. Conversely, a16z Crypto maintains that banks will adopt permissioned 'programmable financial infrastructure' to meet compliance and governance needs while leveraging blockchain capabilities like atomic settlement. Sentora co-founder Jesus Rodriguez also opposed a16z’s view, proposing that institutions might layer compliance and custody mechanisms atop existing DeFi infrastructure.

This debate intensifies amid rapid developments in RWA tokenization and institutional-grade on-chain applications.