Fintech is using technology to improve financial services. We have seen the rise of challenger banks like Revolut, payment processing companies like Square and Stripe, post purchase payment companies like AfterPay and Klarna, Robo-advisors and the list goes on.

In this article we contrast Fintech with DeFi, or Decentralised Finance. DeFi is financial infrastructure built on top of open blockchains like Ethereum. The new financial infrastructure being built in DeFi can be categorised in verticals such as:

  • Lending/Borrowing
  • Synthetic Assets
  • Derivatives
  • Decentralised Exchanges
  • Decentralised Asset Management

Looking at DeFi vs. Fintech it is clear to us that the key differentiator here is that Fintech is trying to improve existing financial services while DeFi is building a whole new infrastructure from the ground up. Using the terminology of billionaire entrepreneur and venture capitalist Peter Thiel, DeFi is a Zero to One innovation. Fintech on the other hand is running on the old legacy financial rails. Challenger banks still need to tap into the legacy networks between banks, despite some of them being mobile only it is not necessarily more open and inclusive and payments still take a lot of time. Robo-advisors use technology such as AI to improve the investment process, but it still needs to access traditional investment vehicles. In tech speak, they are able to improve on the higher stack layers, what the user is seeing but below the shiny app is the same old engine.

This is how we believe Fintech and DeFi compares across a few metrics:


In July Apollo Capital held a Digital Asset Webinar for Institutional and Family Office Investors. I asked Kain Warwick, the founder of Synthetix, the question about how DeFi is fundamentally different than Fintech:

We believe DeFi represents the first time in human history that we have permissionless innovation in finance on a global scale. The reason for this is that DeFi is purely software based. Open source software that is shared, copied, built on and iterated on until a product market fit is found. By being built with just software, it’s global and accessible to anyone with an internet connection. Through cryptoeconomics, DeFi protocols can share its economics with its users — a powerful incentive to bootstrap a community.

In just the last few months we have seen a cambrian explosion in innovation and experimentation taking place in DeFi. It’s a privilege to have a front row seat to this sea of innovation and to do our bit to help push the space forward by being an active participant in these new networks.

You May Also Like

A Small Allocation

by Tim Johnston March 16, 2021

Please note this article is not personal financial advice. Apollo Capital are not privy to your personal financial circumstance therefore this article is general in its nature. The simulated portfolio weightings included in this article are for illustration purposes and should not be used as a guide for structuring your portfolio. Please do your own […]

DeFi Assets: Equity For The Decentralised World

by Matthew Harcourt April 13, 2021

In the early days of crypto assets it was extremely hard to find genuine economic value being created outside of Bitcoin. Many of the earliest crypto assets were either meme’s (DOGE) or variations of Bitcoin (Litecoin) with different experimental use cases. The launch of Ethereum in 2015 has enabled crypto assets to have greater utility […]

Scaling Ethereum

by Marc Woodward May 18, 2021

High gas fees have had a severe impact on the retail adoption of the Ethereum blockchain and Ethereum based DeFi. The excessive cost to transact often causes retail investors to overlook the fundamentals of Ethereum in search of a quicker, cheaper and ‘easier’ option. While this has caused frustration for believers in Ethereum, you can’t […]