How does Web3 differ from traditional finance models?

Web3 shifts control from centralized entities to decentralized networks, enabling peer-to-peer interactions without relying on traditional intermediaries like banks. Unlike traditional finance, which depends on institutions to validate and manage transactions, Web3 uses blockchain technology and smart contracts to automate trust and enforce agreements. Users retain ownership of their data and assets through decentralized wallets and identity systems. In Web3, decentralized finance (DeFi) platforms offer lending, borrowing, and trading without centralized oversight. Governance often occurs through community voting using tokens. This contrasts with traditional finance’s hierarchical decision-making. Overall, Web3 promotes transparency, inclusivity, and innovation, challenging the exclusivity and rigidity of conventional financial systems.