The Inherent Challenges and Historical Opportunities of the Current Global Financial Paradigm

We stand at a historical singularity where the global financial paradigm is undergoing structural transformation, driven by the information technology revolution. For centuries, the traditional finance (TradFi) system, with centralized intermediaries as its core nodes, has laid the foundational framework for the modern global economy. However, its inherent structural flaws—rooted in its centralized DNA—have increasingly become fundamental barriers to the efficient and equitable flow of global value.

1. Prohibitive Trust Costs and Inherent Lack of Transparency

The essence of TradFi lies in building trust through complex legal contracts and multi-tiered intermediary credit endorsements, a process that incurs exorbitant trust-production costs. These costs manifest as lengthy transaction chains, high settlement fees, and massive compliance expenditures. More critically, the inner workings of this system remain an opaque "black box" to end-users, harboring significant moral hazards and ineradicable operational risks that erode market confidence.

2. Fundamental Efficiency Bottlenecks and Structural Access Barriers

Without a unified, real-time, atomic settlement layer, core TradFi processes—such as cross-border payments and securities settlement—typically require T+N settlement cycles. This not only ties up massive amounts of social capital but also severely undermines capital mobility. Concurrently, premium investment opportunities at the top of the pyramid—including private equity, structured credit products, and art investments—are monopolized by prohibitive capital and eligibility thresholds. This creates a structural "investment caste system," completely excluding the general public from the wealth appreciation benefits of high-quality assets and exacerbating global wealth disparity.

3. Prevalent Information Asymmetry and Rigid Value Silos

The power to produce, process, and distribute financial information is highly concentrated in the hands of a few institutions, creating severe and insurmountable structural information asymmetry between retail investors and institutional players, as well as among different market participants. Moreover, major global asset markets—whether equities, bonds, real estate, or commodities—operate as isolated "value silos," fragmented by disparate regulatory regimes and clearing systems. The high costs of value flow and risk hedging between these silos hinder the optimal allocation of global capital.

The FinTech revolution, grounded in internet technology, has undoubtedly delivered significant optimizations at the user interface (UI/UX) level—enhancing convenience in payments, lending, and beyond. Yet, its underlying architecture remains confined to the centralized client-server model. Users still cede control of their data sovereignty and ultimate asset ownership to platforms, failing to address the "meta-problem" of finance: trust, transparency, and user sovereignty. As the global economy marches toward digitalization, the imperative to transcend these systemic limitations and build a more inclusive, efficient, and trustworthy financial ecosystem has never been more urgent.