Is DeFi Cheaper than TradFi?

Generally speaking, yes, borrowing money through blockchain protocols is often more cost-effective.

Interest rates in DeFi tend to be lower and there are typically no origination or monthly administrative fees.

In DeFi, interest rates adjust dynamically based on real-time supply and demand. In contrast, TradFi loan rates are relatively static, determined by centralized institutions.

Over the past 13 months, the average cost to borrow stablecoins onchain was around 11% APR, compared to approximately 17% APR for a typical personal loan in the U.S.

Many DeFi users view its perceived volatility as a feature, not a flaw.

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