16 Ways Crypto Leaders Can Help Bridge Web3 and TradFi

When it comes to traditional finance, crypto and blockchain leaders face something of a disconnect. TradFi firms are in a sense competition, but unless TradFi embraces Web3, Web3 cannot reach its full potential. Complicating efforts to reach out to TradFi are mutual uncertainties: Crypto and blockchain pioneers fear that TradFi’s influence could undermine industry enthusiasts’ value of consumer- and transparency-first engagement, while TradFi firms are wary of a new industry whose technology and policies they use. do not understand.

With its long history, traditional finance is familiar to consumers and has gained widespread trust. By partnering with TradFi firms, Web3 organizations can capture some of that positive feeling. Furthermore, by viewing TradFi as a potential customer base, Web3 firms can begin to grow organically. From “ceasing hostilities” to casting a wider net, there are many things crypto and blockchain leaders can do to bridge the gap between Web3 and TradFi. Below, 16 members of the Cointelegraph Innovation Circle share their ideas.

Agree that there is room for everyone to build together

I often see those in the traditional financial industry resisting Web3 infrastructure and innovation, and vice versa. I believe that we must adopt the mindset that there is room for all of us to build together. There is no perfect Web3 or traditional financial product that will serve every use case. Industry-wide disruption happens when we build out this new ecosystem together. – Megan Nyvold, BingX

Collaborate on products to serve younger, tech-savvy investors

There is too much of an “us versus them” narrative when it comes to Web3 and traditional finance. In reality, they must work together to meet the demands of 21st century customers. Crypto leaders can address this by working together with fintechs and TradFi companies, leveraging each other’s strengths to develop products and services aimed at younger, more tech-savvy investors. – Molly Glennon, Ditto

See TradiFi companies as potential customers

The first step is to understand that TradFi companies are not our enemy; they are a possibility. TradFi users are basically everyone in the community, and TradFi companies already have relationships of trust with these people. We in DeFi should be focused on building the tools that TradFi companies need, seeing them as potentially our biggest customers. – Budd White, Tacen

Look for Web3 solutions that enhance current TradFi products

Web3 emulates TradFi products with global reach and the transparency of the public blockchain. If you’re in TradFi, start with what you know and look for things that mimic or improve on those products. Then look at what is different from what you know. Identify the problem that this differentiation solves. Look at who is in the value chain (and their financial incentives). This bridges the gap. – Shawn Douglass, Amberdata

Contact TradFi institutions to collaborate on specific solutions

Industry leaders can work to create partnerships and collaborations with traditional financial institutions, helping them understand how blockchain and cryptocurrency can be integrated into their existing systems and processes. This may involve developing customized solutions for specific use cases or working to create interoperability between Web3 and traditional financial systems. – Theo Sastre-Garau, NFTaften

Bring the two industries together to establish regulations for blockchain technology and cryptocurrency

Collaborate with traditional financial institutions and regulators to establish clear guidelines and regulations for the use of blockchain technology and cryptocurrency. The development of security, compliance and reporting standards will make it easier for ordinary investors and financial institutions to participate in the Web3 ecosystem, which in turn increases trust and confidence in the technology. – Vinita Rathi, Systango

Realize that normal Web3 practices feel unfamiliar to most TradFi users

To include the majority of non-native Web3 users, the user experience of all applications in our space must be improved. We are precocious enough that it may feel normal to us to change chains and pack belongings, but it is a foreign language to most people. Web3 needs to feel more like “Web2.5” to really turn things around. I see some projects, like Firepot finance, put a lot of emphasis on UX to pass on TradFi users. – Ben Knaus, RillaFi

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Design better user interfaces and easier onboarding

Crypto and blockchain organizations need to offer better interfaces and user onboarding. Decentralized applications and other decentralized platforms must be extremely intuitive and user-friendly to avoid deterring retail investors. If more retail investors turn to DeFi, traditional financial institutions will be more inclined to venture into the space themselves. -Anthony Georgiades, Pastel Network

Focus on the technology’s usability and real benefits

Too many people are trying to force Web3 adoption on a technical level. What we need is more “Web2.5” innovation that helps bridge the gap and transition people to Web3 without forcing the issue. Pioneers may appear too aggressive for traditional worlds; we need to lure into the traditional worlds with the ease of use and the actual benefits of the technology, not through powerful sales tactics. – Brian D. Evans, BDE Ventures

Start tokenizing real-world assets

Tokenization of assets such as real estate is a way to bridge the gap between Web3 and TradFi. This counters the argument that cryptoassets are just “pet stones” because these tokens can represent ownership of real-world tangible assets like real estate, cars, watches, and more. – Zain Jaffer, Zain Ventures

Be honest about what blockchain can and cannot do

Be honest with users about what they really need for their business. Ask how and if blockchain is the right way and what concrete benefits it will bring. TradFi may not be perfect, but the crypto space isn’t fully mature either. Hybrid solutions that mitigate users’ concerns about risk can also help bridge the gap. – Yaoqi Jia, AltLayer

Create clear definitions for the room

Unfortunately, there is much unknown to those in charge of the regulatory side of Web3. We need to work harder to create clear definitions for this rapidly evolving space. Then we can start speaking and understanding the same language, which will hopefully lead to better coordination. From there, we can unlock a productive path forward and ultimately bridge this gap. – Matthew LaCrosse, MetaEngine

Ensure you are compliant with regulatory policies and guidelines

It comes down to one word: compliance. Regulated TradFi is not going to interoperate with Web3 and distributed ledger technology if it is not compliant or if it does not operate within the accepted boundaries of guidance issued by regulators or policy made by legislators. The other important thing is to act like a company that will support a financial institution. Document your processes and procedures and be ready to show that you are an adult. – John Wingate, BankSocial

Openly discuss Web3’s problems and what the industry can learn from Web2

We can bridge the gap by openly discussing the problems Web3 and blockchain technology solve, the problems that hinder growth, and what we can learn from Web2 to shorten the growth curve of the industry. In this way, both those in the traditional financial area and those in the Web3 area can participate in progressive dialogue that benefits both industries. — Mohak Agarwal, ClayStack

Think globally

While crypto and DeFi in the US are mired in regulatory uncertainty, blockchain leaders may continue to make inroads in other markets around the world. Institutional investors in Asia, for example, are more enthusiastic about Web3 at the moment than their counterparts on Wall Street. – Wolfgang Rückerl, ENT Technologies AG

Ensure that Web3 systems integrate smoothly with Web2

Web3 and Web2 must work together to drive exponential value. The identities in Web2 — email, Okta, etc. — need to be mapped to Web3 identities like wallets. Web3 must integrate with Web2 systems, and Web3 firms must also ensure that Web2 users have the ability to pay gas fees and so on with crypto or fiat. Many traditional companies are not comfortable keeping crypto on their balance sheet. – Nitin Kumar, zblocker

This article was published through the Cointelegraph Innovation Circle, a researched organization of top executives and experts in the blockchain technology industry who are building the future through the power of connections, collaboration and thought leadership. Opinions expressed do not necessarily reflect those of Cointelegraph.

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