Traditional finance faces numerous criticisms, but its biggest drawback remains the constant and often eternal dependence on intermediaries. Banks, payment processors, and clearinghouses slow down transactions and increase costs. This system limits access to finance. Neobanks attempted to change this formula but retained many old practices. Strict KYC (know your customer) procedures and a lack of transparency mean that users still face the challenge of understanding how their funds are managed.
Now a new model comes into play: deobanks operating on blockchain technology. They completely eliminate intermediaries. This shift ensures faster, cheaper, and more transparent banking. At the center of these changes is WeFi, one of the world's first deobanks. WeFi proves that a bank can operate on-chain and serve everyone. It picks up where neobanks left off and answers the call for a fairer financial system.
Why neobanks have remained ineffective
Neobanks popularized digital banking. They offered better fees and faster service than traditional banks. However, they adhered to many old rules. Their operations depend on TradeFi systems and the same strict KYC methods. These methods deny more than a billion unbanked users access to financial services, especially in underdeveloped communities.
Neobanks also use outdated infrastructure. Their systems are prone to account freezes, slow payments, and high costs for international transfers. They even offer physical cards, which have little value in the digital age. This approach leads to hidden risks and additional costs for users.
Dependence on outdated systems makes neobanks vulnerable. When something goes wrong, customers face delays and unnecessary expenses. Their services do not meet the needs of the modern digital consumer.
How deobanks solve these problems
Deobanks (decentralized on-chain banks) abandon old models by using blockchain technology. They operate entirely on-chain, eliminating intermediaries and offering clear advantages.
The use of blockchain creates a secure environment where every action is recorded and open for viewing. This transparency allows users to see how their funds move through the system. Transparency builds trust and gives people a new level of control over their money. For example, consider the non-custodial accounts of WeFi. With this feature, the money always remains with the owner, and the smart contract bridge connects the personal wallet to the WeFi bank account. Users do not suffer from unexpected account freezes. They can spend money using a digital card that works in the real world. This model gives users the freedom to decide how to use their money. It eliminates the risk that arises when the bank has complete control over the funds.
WeFi also uses artificial intelligence (AI) to optimize compliance procedures as well as to optimize revenue. The platform simplifies KYC processes with the help of AI agents. These agents adapt to the user's personal risk profile and help make investment decisions. AI plays a central role in reducing bureaucratic delays. This speed allows users to easily access funds and tools to create wealth. The AI-based approach simplifies tasks that have long hindered traditional banking.
For everyday transactions, WeFi uses stablecoins. They help make international payments almost free and instant. This method reduces the high fees and delays typical of outdated systems. The use of stablecoins aligns well with a limitless financial system. Thanks to stablecoins, deobanks make it easier for people to send money between countries with minimal obstacles.
The future of banking
Deobanks represent a clear shift in financial services. The traditional model, burdened by intermediaries, slows progress. WeFi shows that there is a better way. Decentralized banks work with a focus on transparency and user control. They free users from the risks and hidden costs of outdated systems.
Developers can use this information to create creative tools that operate in an open decentralized network. On-chain data and smart contract bridges open up new opportunities for secure financial applications.
Overall, the decentralized model attracts attention with its prospect of fairer fees and faster payments. Lower operational costs and quick transactions offer investors the opportunity to support a system that aligns with the global movement towards digital finance. With platforms like WeFi, investors gain a stake in a future that values transparency and efficiency.
*Investing involves risk, and your investments may lose value. Past performance is not indicative of future results. These statements are not and cannot replace investment advice.