[TL;DR]
- 15% of Korean finance app users already use other platforms to trade on-chain assets, translating into an estimated KRW 200B+ per year in opportunity cost.
- Traditional financial institutions move slowly because four barriers—technology, organization, regulation, and business model—are tightly intertwined. Solving just one won’t break through.
- Survival requires a parallel strategy: borrow wallet infrastructure, solve regulation through collaboration, run small and fast teams, and build trust through transparency.
1. Your users are already using other apps
1.1 The reality of multi-homing
Three out of ten users of Korean finance apps use two or more trading platforms at the same time. They buy stocks on Toss, trade crypto on Upbit, and purchase U.S. equities through Kakao Pay Securities. The issue is that this isn’t really a choice. Users bounce between apps because no single app lets them do everything.
A 2024 survey found that the top reason finance app users add another platform is simple: “The product I want isn’t available in my app.” In other words, access to new asset classes has become the deciding factor in platform selection. If you want to bet on U.S. election outcomes but your app can’t do it, you go to Polymarket. If you want to buy a Solana memecoin but it’s not listed on your exchange, you create a Phantom wallet.
This is dangerous because it’s not a clean churn event. Users are still in your app. They still log in and transact. But your wallet share quietly shrinks. What begins as 80:20 turns into 60:40, then flips. And eventually the user asks: “Do I still need this app?”
1.2 The real problem
Multi-homing itself isn’t the problem. Using multiple apps is natural. The real danger begins when you lose the primary platform position—the app that becomes the center of a user’s financial life: the first app they open, the place they trust with most of their assets.
Imagine a platform with 2 million monthly active users. Suppose 15% of them trade on-chain assets on another app at least once a month. Based on average crypto exchange fee rates, that’s roughly KRW 50,000 in monthly fees per user. Do the math and you get roughly KRW 200B per year. That’s not “lost revenue.” It’s your competitor’s profit.
There’s an even worse scenario: global platforms enter Korea at full scale. What happens if Robinhood launches Korean-language service, Binance enables KRW deposits and withdrawals, or Coinbase secures a domestic license? They already offer perpetual futures, prediction markets, and memecoins. From the user’s perspective, the choice is obvious: go where everything is available.
Today it’s parallel usage. Over time, it becomes full migration. The key question is what you prepare before that switching point arrives.
2. The pattern of financial innovation: history repeats
2.1 First generation: Offline to online (1990s)
In the mid-1990s, buying a stock meant calling your brokerage. You spoke to a broker, placed an order verbally, and received confirmation later. A single trade could cost KRW 100,000–300,000 in fees. You could only trade during business hours, and if the phone lines were busy, you missed your opportunity.
In 1997, Ameritrade began offering online trading for $8 per trade. Incumbents mocked it. Merrill Lynch reportedly dismissed online trading as something for “gamblers,” insisting that face-to-face advisory was the real essence of brokerage.
But by 2000, Merrill Lynch had lost significant market share and was forced to launch its own online platform.
Korea followed a similar trajectory. When HTS first emerged, many brokerages waited on the sidelines, assuming users wouldn’t bother with complicated software. But those who won online first captured retail investors. Late movers were merged, marginalized, or disappeared entirely. Many regional brokerages simply faded into history.
2.2 Second generation: Paid to free (2010s)
In 2013, Robinhood launched commission-free stock trading. The industry argued it was unsustainable. E*TRADE, TD Ameritrade, and Charles Schwab defended $5–$10 commissions as proof of superior service and stability. Fees were framed as evidence of quality.
Six years later, Robinhood surpassed 10 million users and became the first investing platform for a younger generation. In October 2019, major brokerages announced the elimination of commissions—on the same day.
But the game was already over. TD Ameritrade was acquired by Schwab, and E*TRADE was acquired by Morgan Stanley. Six years feels long, but it was far too short to regain lost market share.
Korea wasn’t an exception. Domestic brokerages moved later but ultimately joined the fee war. The problem was they didn’t have enough time to redesign their revenue models. Fee-dependent businesses collapsed overnight, and those without alternatives absorbed a hit to profitability.
2.3 Third generation: Restricted to open (early 2020s)
Before 2020, retail investors couldn’t easily participate in angel investing. You needed significant capital and strict qualifications. Pre-IPO stock trading was largely reserved for high-net-worth individuals. Traditional angel networks and private funds believed regulation would protect those barriers. The logic was that restricted access preserved market quality.
Then platforms like AngelList, Republic, and Kalshi changed the game. Small checks could fund startups. Prediction markets gained legal footholds. While regulators clarified frameworks, incumbents did nothing. When markets opened, new players had already built infrastructure and captured users.
Korea saw similar shifts: crowdfunding platforms, mainstream U.S. stock access, and explosive crypto exchange growth. Traditional financial institutions waited, citing regulatory uncertainty. New platforms moved first and took the market. Late entrants learned the painful reality of being a follower.
2.4 The shared pattern—and the lesson
Across all three generations, the pattern is strikingly consistent. A new technology or model emerges. Incumbents doubt sustainability. At first it’s dismissed as niche—until it suddenly becomes mainstream. Late movers rush in, but the gap never fully closes.
The crucial point: technology alone was never enough. Online trading required trust, regulatory adaptation, and a new revenue model. Free trading required alternative monetization, UX redesign, and robust risk management.
Winners weren’t defined by pure technical capability. They were defined by speed of sensing change, timing of experiments, and the willingness to absorb failure.
And now, a fourth generation transition has begun: the era of on-chain assets. Will the pattern repeat—or will this time be different?
3. The fourth turning point: On-chain becomes mainstream (2025–)
3.1 The global market is exploding
During the 2024 U.S. presidential election, Polymarket recorded $3.7B in volume for a single event. It was praised for producing predictions more accurate than traditional polls, and major media began citing Polymarket probabilities. Prediction markets became news, and millions directly bet on political outcomes—unthinkable just two years earlier.
Robinhood launched prediction market services in 2024 and reportedly generated $100M+ in revenue in its first year. Existing stock traders flowed naturally into prediction markets, while younger users showed greater interest in event-based markets than in traditional assets. Hyperliquid processes billions of dollars daily in perpetual futures volume, proving that leveraged trading can exist without centralized exchanges.
Kraken began offering memecoin trading alongside tokenized stock services. Magic Eden expanded from an NFT marketplace into a cross-chain token trading platform. The real driver is speed: when a new asset appears, trading begins within hours. No listing committee, no legal review cycle, no six-month integration roadmap. If it exists on-chain, it can be traded.
3.2 Korea’s paradox
Korea ranks among the top markets globally by crypto trading volume. “Kimchi premium” is a term recognized by traders worldwide. Younger users often encounter crypto before equities, and memecoin communities form in real time on social platforms. Demand clearly exists.
Yet the response from financial institutions is among the slowest. Only a handful of brokerages provide crypto trading—and even those support limited assets. Prediction markets are treated as outright illegal. Traditional financial firms offering DeFi products or tokenized assets are essentially nonexistent. Few markets show such a large gap between demand and supply.
Into that vacuum step global platforms. Korean users bypass restrictions through VPNs or offshore exchange accounts. Binance, Coinbase, and Bitget continue strengthening Korean-language support. Once KRW on- and off-ramps are solved, they are positioned to compete head-on with domestic players. Robinhood has publicly signaled expansion into Asia and has mentioned Korea as a key target.
The bigger issue is time. While global platforms prepare for Korea, what are domestic incumbents building? While you wait for regulatory clarity, users are already trading on-chain elsewhere—and switching away from a platform that already “works” is harder than it looks.
3.3 Opportunity cost in numbers
Let’s quantify what’s often framed as a vague threat. Assume a finance platform has 2 million active users. Suppose 15% trade on-chain assets on other platforms at least once a month. Even conservatively, that’s 300,000 users.
Average exchange fees are roughly 0.1%–0.2%. If each user trades KRW 5,000,000 per month, the platform earns KRW 5,000–10,000 in fees. Add withdrawal fees, spreads, and premium services, and you can reasonably estimate KRW 50,000 in direct monthly revenue per user. For 300,000 users, that’s KRW 15B per month, or KRW 180B per year.
And that’s only direct revenue. Indirect losses are bigger: users spend more time elsewhere, open your app less frequently, generate less ad revenue, reduce cross-sell opportunities, and leave you with poorer behavioral data. Total opportunity cost quickly becomes hundreds of billions of KRW.
More importantly: will that 15% shrink—or grow? On-chain interest is increasing, access is improving, and new asset classes keep emerging. The direction is obvious. If you don’t move now, 15% becomes 30% or 50%. At that point, it’s no longer a revenue problem. It becomes a survival problem.
4. Why are traditional financial institutions slow?
4.1 The technology barrier
Handling on-chain assets is fundamentally different from traditional systems. Brokerage backends run on centralized databases: balances, settlement, and trade histories are internally controlled. Blockchains are distributed ledgers: transactions broadcast to a network, confirmations processed by external validators, and finality takes time. The two worlds operate differently at the core.
Security requires a different model too. Traditional finance relies on custody: the institution holds customer assets and controls access centrally. On-chain, whoever holds the private key owns the asset. Lose it and recovery may be impossible; leak it and assets can be stolen immediately. For institutions, that model introduces uncomfortable questions: Who is responsible if a customer loses a key? How do you compensate theft?
Add multi-chain complexity. It’s not just Ethereum. There’s Solana, Base, Polygon, Arbitrum, Optimism, and more. Wallet structures differ by chain. Transaction formats differ. Gas models differ. Adding one asset can become a six-month engineering project because it may require integrating an entire chain stack.
4.2 The organizational barrier
Even if technology is solved, decision-making slows everything down. Large financial institutions must pass through layers: product planning, risk review, legal analysis, compliance monitoring design, IT integration scheduling, and executive approval. Every step adds meetings, reports, and revision cycles.
Worse, nobody wants to own the risk. On-chain is still perceived as unproven. If it succeeds, the team shares credit. If it fails, an individual often bears blame. A rational risk-avoidance culture forms. “Let’s wait and see” repeats in conference rooms. People assume it won’t be too late to move once regulation is clear, the market is validated, or a competitor proves the model.
Silos slow things further. IT evaluates feasibility, legal highlights risks, business demands profitability—each from their own lens. No one has authority to orchestrate end-to-end alignment. As a result, the most conservative viewpoint wins. Once someone says “we can’t,” the project stops.
4.3 The regulatory barrier
Even after overcoming technology and organization, regulation remains. In Korea, crypto-related services still operate in legal grey zones. Under the Act on Reporting and Using Specified Financial Transaction Information, VASP reporting is required, but what’s clearly permitted versus prohibited remains unclear. Prediction markets? Tokenized real estate? Perpetual futures? Each has different legal status.
Compliance is costly. AML monitoring systems must detect suspicious activity in real time. Institutions must connect on-chain addresses to real identities. On-chain monitoring tools like Chainalysis or TRM Labs can cost hundreds of millions of KRW per year. But to justify that cost, you need volume—yet you can’t predict volume before launch. It’s a classic chicken-and-egg loop.
Licensing also takes time. VASP reporting alone can take 6–12 months. Requirements shift as laws evolve, sometimes forcing teams to restart preparation. Institutions then default to “let’s wait until things stabilize.” But regulation rarely arrives before markets. Usually, regulation follows after the market already exists. The longer you wait, the further the opportunity moves away.
4.4 The business model barrier
Finally, the economics are uncertain. Launching on-chain services requires significant upfront investment: infrastructure, hiring, marketing, compliance systems—often billions of KRW. But revenue is unpredictable: user adoption, volume, and payback timing are all unclear.
There’s also cannibalization risk. Crypto trading fees are often lower than traditional asset fees. If users shift volume from stocks to crypto, fee revenue could decline. New business may erode existing business. Executives naturally prefer protecting reliable current profits over chasing uncertain future ones.
Short-term performance pressure compounds the issue. Public companies must report quarterly results. Shareholders expect immediate outcomes. On-chain businesses often require 2–3 years of investment runway. For several quarters, you may incur costs without meaningful revenue. Selling that story to boards is difficult, so “let’s observe longer” becomes the default choice.
These four barriers reinforce one another. Solve technology and the organization still won’t move. Move the organization and regulation blocks you. Clear regulation and the business case may still be weak. You must solve all four at the same time. That is the real reason traditional finance is slow.
5. The solution must be parallel, not sequential
5.1 Borrow the infrastructure
Building on-chain infrastructure from scratch is inefficient. Wallet creation, multi-chain support, and security validation can take months or years. But proven solutions already exist—used by hundreds of projects and millions of users, updated continuously.
Wallet infrastructure services are a prime example. They provide the full lifecycle via APIs: wallet creation, management, recovery. With MPC or TSS, private keys are distributed without a single point of failure. Users can recover access even if they lose credentials. Multi-chain is supported by default, gas fees can be abstracted away, and integration can be completed in weeks.
These services have limits. They’re infrastructure layers—not strategy. Asset selection, monetization, and regulatory positioning still belong to the institution. Dependency risk also exists: you can’t fully control outages, and customization can be constrained. Still, compared to building from scratch, they are faster and often safer.
As scale grows, institutions can add institutional-grade custody: insurance coverage, regulatory reporting features, and audit-friendly trails. Costs rise, but for large AUM and strict compliance requirements, it becomes essential. A practical path is to start with lightweight wallet infrastructure and layer custody later.
Liquidity access matters too. Building your own liquidity pools requires major capital. Instead, use aggregators that route across multiple DEX liquidity sources. The same applies to cross-chain bridges. Smart contract risk remains, but these are protocols moving tens of billions of dollars. The key is choosing the right differentiation point: wallet tech and chain plumbing aren’t differentiators. User experience, asset curation, and compliance are.
5.2 Solve regulation through collaboration
You can’t avoid regulation. But you can choose your approach. The most definitive path is obtaining licenses directly. In Korea, VASP reporting is required, along with AML systems and real-name banking rails. It can take 6–12 months and costs are significant, but it gives you long-term control.
If you need speed, partnerships are an option: collaborate with a licensed provider. Exchanges or fintech partners provide infrastructure; financial institutions provide users and brand. Launch is faster, but revenue is shared and control is limited. Still, it’s effective for testing market response quickly. A common strategy is to start with partnerships while simultaneously pursuing licensing in parallel.
An offshore entity is another option. Singapore, Dubai, and Switzerland offer relatively clear frameworks. Launch globally first, enter Korea later. However, once you target Korean users, domestic law applies—so it’s not a true bypass. Offshore structures are more valuable for global expansion than for Korea-only strategies.
Compliance must be automated. Manual review can’t scale. On-chain monitoring tools detect suspicious activity, trace funds, and block sanctioned addresses in real time. Costs can be high, but without this, compliance risk becomes unmanageable.
Ongoing legal advisory is also necessary because regulation changes continuously—U.S. SEC cases, EU MiCA enforcement, new domestic guidelines. The winning approach is not evasion, but transparent adaptation. Both users and regulators evaluate transparency.
5.3 Keep teams small and fast
Even with infrastructure and regulatory plans, execution fails if the organization can’t move. Traditional decision structures can’t match on-chain market speed. You need a dedicated task force: product, engineering, legal, compliance, and business in one team. Run it separately, give it clear objectives, and protect autonomy.
Decision lines must be simple—no more than two approval layers. Execute weekly, adjust immediately when issues arise. This requires a “ship, learn, iterate” culture rather than “plan perfectly, then launch.” A certain range of failure must be explicitly protected—otherwise nobody will take risk.
Staged rollout is the key. Don’t launch to everyone. Start with 1,000 to 10,000 selected users. Begin with low-risk assets. Stablecoins are an ideal starting point: low volatility, comparatively clearer regulatory framing, and easy for users to understand. During beta, monitor intensely, fix quickly, and build based on user feedback.
If traction is strong, expand gradually: 100,000 users, more asset types, stronger compliance systems. After 6–12 months, consider full launch. Then layer marketing campaigns, advanced features, and expansion into cross-chain and DeFi. You can’t win with enterprise processes. You must operate like a startup.
5.4 Build trust through transparency
Even with technology, regulation, and execution, failure is guaranteed if users don’t trust you. On-chain assets are still unfamiliar to many users. They fear risk and have seen scam headlines. Trust isn’t marketing—it’s operations.
Start with education. Explain what on-chain assets are, how they work, and how they differ. Design step-by-step onboarding. Guide first-time users through stablecoins, then major tokens, then higher-risk assets and DeFi. Interactive tutorials and simulations help users practice before using real money.
Risk communication is critical. Clearly disclose volatility, smart contract risk, and liquidity risk. Avoid language like “high returns.” Use terms like “volatile assets.” Show worst-case scenarios upfront. Tell users they can lose money. Avoiding exaggeration builds long-term trust.
Add guardrails. Early on, set daily or monthly limits. Consider a 24-hour cooling-off period for first trades to prevent impulsive decisions. Notify users when abnormal patterns are detected. If possible, offer limited insurance coverage. You can’t eliminate risk, but showing that you actively manage it matters.
Community-led trust also works. Nurture early adopter groups and incorporate feedback quickly. Run regular AMAs. Share roadmap updates openly. If problems happen, disclose quickly and respond visibly. Users hate opacity more than complexity. Admitting what you don’t know is often better than pretending certainty. Trust comes from perfection less than from honesty.
6. It’s time to choose
This is not an argument that you must offer every on-chain asset immediately. The point is to secure optionality. No one knows exactly when the market will fully open—but when it does, you must be ready.
There are two paths: move now, or wait. If you move now, you can launch a limited beta in six months and decide to scale up or down in a year based on real market response. The risk is upfront investment and uncertain ROI, but you earn the ability to choose.
If you wait—until regulation is fully defined, the market is validated, or competitors prove the model—you may feel safe. But if you start a year late, you won’t close the gap. Six months of technical delay, six months of licensing delay, six months to earn user trust—together, that’s at least 18 months.
Moving now doesn’t guarantee success. The market could open slower than expected. ROI might disappoint. But waiting guarantees failure. On-chain markets are growing, user demand already exists, and global platforms are preparing to enter Korea. The question isn’t “whether” but “when and how.” What choice will your company make?
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