Why Institutions Are Quietly Moving Onchain

InnovationWhy Institutions Are Quietly Moving OnchainByBenedetto Biondi,Forbes Councils Member.for Forbes Technology CouncilCOUNCIL POSTExpertise from Forbes Councils members, operated under license. Opinions expressed are those of the author. | Membership (fee-based)May 08, 2026, 07:30am EDTBenedetto Biondi is the CEO of Folks Finance, a leading crosschain lending protocol in DeFi. gettyAutomated smart contract-based lending has real demand, real advantages and real product-market fit.Decentralized finance (DeFi) began as a niche experiment around 2018 tied to crypto assets. Today, it has grown into a market exceeding hundreds of billions of dollars, largely driven by stablecoin lending backed by collateral such as BTC, ETH and their derivatives.Early users borrowed against long positions, leveraged exposure and arbitraged yields. While these behaviors were often speculative, they proved something more important: Automated smart contract-based lending has real demand, real advantages and real product-market fit. Institutions have noticed.​Why Institutions Are Paying AttentionOver the past year, interest from financial institutions has accelerated. Asset managers, fintechs and banks are exploring how DeFi infrastructure could fit into their systems.​DeFi lending is more efficient, not because it's just a new technology but because it removes layers of intermediaries that add cost, delay and complexity. Traditional settlement still takes T+1 or T+2 in most cases. Onchain (i.e., executed directly on blockchain infrastructure), it can happen instantaneously. As BlackRock CEO Larry Fink wrote in his 2025 annual letter, onchain tokenization could compress into seconds a settlement process that currently takes days, with billions reinvested immediately.Transactions settle faster. Capital can be deployed more precisely. Operational overhead is reduced. Institutions can move parts (or all) of their lending use cases onchain and benefit from a structurally more efficien...