ARK Invest and Sentora refute a16z: Traditional finance will ultimately embrace DeFi, not closed blockchains

What is the ultimate path for TradFi (traditional finance) to embrace cryptocurrencies? In response to the argument from a16z that institutions will only use “permissioned blockchains” rather than decentralized finance (DeFi), ARK Invest and Sentora executives have recently launched a strong rebuttal. They argue that public chains have already won in the tokenized asset race, and that institutions will ultimately rely on open DeFi infrastructure—adding compliance controls on top—rather than retreating to closed private chains.
(Background: A16z founder Marc Andreessen has moved into the Federal Reserve, and the AI productivity task force has officially kicked off.)
(Background addition: The U.S. Federal Reserve has established a “Productivity and Jobs” subcommittee, which has tapped the a16z founder to study AI’s impact and set monetary policy.)

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• a16z: Traditional finance wants blockchain, not DeFi
• ARK counters: Public chains have won; institutions will rely on the DeFi rails
• Sentora: A hybrid model is the ultimate answer for institutional adoption

With the explosive growth of tokenized assets and real-world assets (RWA), the route for traditional financial institutions (TradFi) to enter the crypto market has become the focus of intense debate in the industry. On July 16, 2026, Taipei time, according to a report by the foreign media outlet Cointelegraph, executives from venture capital firm a16z, ARK Invest, and Sentora have engaged in a deep clash of views over whether institutions will adopt “blockchain technology” or truly embrace decentralized finance (DeFi).

a16z: Traditional finance wants blockchain, not DeFi

The debate stems from views that a16z crypto (Andreessen Horowitz’s crypto division) recently posted on X (formerly Twitter). The firm predicts that traditional banks and asset management companies will not truly embrace permissionless DeFi, but will instead selectively borrow blockchain layer-1 primitive technologies, such as tokenization and atomic settlement.

a16z believes that traditional financial institutions tend to build “programmable financial infrastructure.” In essence, these architectures will still maintain permissioned and centralized institutional control in order to meet existing stringent compliance, governance, and operational needs.

ARK counters: Public chains have won; institutions will rely on the DeFi rails

However, the comments were immediately met with strong pushback from crypto-native experts. Lorenzo Valente, Head of Crypto Research at ARK Invest, responded on X, stating that the development and adoption rates of public blockchains have already far surpassed early private blockchain initiatives. He cited tokenized asset data showing exponential growth on open networks such as Ethereum, as the best evidence that public chains have won.

Valente further emphasized that crypto-native companies like Circle and Coinbase are more suited than traditional financial institutions to build the next generation of financial infrastructure in terms of innovation and execution speed. He boldly predicted that in the future, institutions will increasingly rely on open DeFi rails rather than simply adopting closed blockchain networks.

Sentora: A hybrid model is the ultimate answer for institutional adoption

In response, Sentora co-founder Jesus Rodriguez also voiced objections similar to ARK’s. He said that institutional adoption is not a zero-sum game of “all or nothing,” but more likely a hybrid approach.

Rodriguez believes it is highly likely that traditional institutions will directly adopt open and efficient DeFi underlying infrastructure, while at the “top layer” of that infrastructure they add necessary compliance reviews, custody of funds, and enterprise control measures—so they can enjoy DeFi efficiency while meeting regulatory requirements. This debate reflects two starkly different predictions about how the crypto industry believes the future financial system will evolve, and also suggests that crypto-native companies that keep the open spirit in the future RWA race will continue to clash fiercely with traditional giants.