Why Banks & Mutual Funds Are Basically the Native Layer 2 of Crypto?

It sounds absurd, but the logic of Financial Intermediaries is the same as that of Web3 infrastructure - both are involved in capital flow.

The traditional financial intermediaries (banks, funds, insurance) do the following: collect money from A → lend it to B → pocket the difference. It sounds simple, but there are intricacies involved:

Core Value:

1. Liquidity Exchange - Your deposits can be withdrawn at any time, but the bank can convert them into long-term loans. This is called “term transformation,” similar to the matching trading principle of CEX.

2. Risk Diversification - The fund pools your money together to buy 100 stocks, something you can't do alone. The liquidity mining joint pool in the crypto ecosystem operates on the same logic.

3. Information Asymmetry Resolution - Banks assess who can repay, fund managers select stocks. On-chain, this is done by oracles + smart contracts.

4. Cost Optimization - Banks can reduce the cost per transaction by processing a large volume of transactions. This is why the fees on exchanges are much cheaper than over-the-counter transactions.

Changes in the Digital Age: Traditional financial intermediaries are facing challenges - P2P lending and crypto lending protocols (such as Aave and Compound) are directly challenging their “monopoly status”. But the core logic remains unchanged: connecting those with money and those in need of money, and earning the value difference from it.

Financial Intermediaries will not disappear; they will only evolve. The question is: what form will the next generation of intermediaries take?