Connecting DeFi with TradFi | Sonya Kim (3F) at ETHConf

Sun, Aug 2, 2026, 12:00 AM

In this talk, Sonya Kim, co-founder of 3F, a new leverage vault protocol built on Morpho that provides automated customized leverage exposure on RWA yields, explains how to connect DeFi with TradFi. Drawing on 10 years as an equity portfolio manager before joining Steakhouse Financial in 2023 and launching the first ever Morpho vault in January 2024, she argues the two worlds are deeply complementary. TradFi brings diversified cash flows from real economic activity, deep underwriting rigor from specialized fund managers, and established legal recourse, which is exactly what DeFi lacks given its scarce on-chain revenue, reliance on unsustainable token incentives, and shaky underwriting seen in recent blowups like Stream Finance and the Resolve infinite mint hack. Conversely, DeFi solves what TradFi struggles with: active managers face fee pressure from passive ETFs and want new distribution, leverage is gated to institutions, and the space is opaque, while DeFi offers a global permissionless user base, composable primitives (noting Morpho's $175 million raise announced that day), and full transparency. Sonya frames RWAs as a bright spot, with issuance growing from nothing in 2023 to a hockey stick led by US Treasuries, and argues issuance is now largely solved, leaving the question of what to do with on-chain presence. Taking inspiration from how a single Treasury instrument is reused across savings, money market funds, repo, and hedge fund carry and basis trades to create higher asset velocity, 3F targets the leverage carry trade (over a trillion dollars notional in TradFi). She explains that looping is trivial for crypto native assets via flash loans in one 12 second block, but breaks for RWAs because settlement delays like T+1 compound, so reaching 5x leverage could take 20 loops over 20 days. 3F solves this with an IRL flash loan mechanism where bridge facilitators extend an upfront loan, letting users build one-click leverage on RWAs in a single settlement cycle. She walks through a product launched with FalconX (a tokenized private credit instrument brought on chain via Pareto) offering up to 6.5x leverage and over 20% real yield at max, and outlines the five ecosystem players (RWA issuers, Morpho lenders, bridge facilitators, leverage LPs, and liquidators). She closes urging the industry to focus on new use cases impossible in the real world. 00:00 Introduction 00:39 Sonya's TradFi Background and Steakhouse 01:08 Launching the First Morpho Vault 01:37 Why TradFi and DeFi Are Complementary 01:59 What TradFi Brings: Underwriting and Recourse 02:25 What DeFi Struggles With 02:59 Recent Blowups: Stream Finance and Resolve 03:23 Where TradFi Benefits What DeFi Lacks 03:55 The Challenges Facing TradFi Asset Managers 04:27 Why Leverage Is Gated to Institutions 04:54 What DeFi Has Already Solved 05:23 Why TradFi Wants to Come Into DeFi 05:53 The Hockey Stick Growth of RWAs 06:31 Why Issuance Is Now Solved 07:07 Learning From How Treasuries Are Used 07:32 The Many Use Cases of Treasuries 08:05 Hedge Funds and Yield Strategies 08:29 Creating Higher Asset Velocity 09:06 Why 3F Targets the Leverage Carry Trade 09:33 How Looping Works 10:05 The Math of Amplifying Yield With Leverage 10:32 Why Looping Breaks for RWAs 11:03 Why Looping Is Easy for Crypto Native Assets 11:56 Why RWA Settlement Delays Compound 12:32 Why 20 Loops Takes 20 Days 13:00 3F's One-Click Leverage Primitive 13:33 Mimicking the Flash Loan With Bridge Facilitators 14:34 Walking Through a 5x Leverage Position 14:55 Leverage in One Settlement Cycle 15:21 The FalconX Private Credit Product 15:51 How the SPV Is Tokenized by Pareto 16:17 The Math: Over 20% Real Yield at Max Leverage 16:51 Why We Build Small Primitives Together 17:24 The Five Players in the 3F Ecosystem 17:53 Bringing Quality Assets to Morpho Lenders 18:22 Bridge Facilitators as Connective Tissue 18:50 Leverage LPs and Liquidators 19:29 Focusing on Use Cases Not Possible in the Real World 20:02 Closing _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ *ETHConf 2026* ETHConf is a 3 day event for founders, industry leaders, and builders who are excited about the possibilities of building on top of Ethereum. Connect with 2,000+ top innovators in crypto, finance, technology, and policy at our inaugural three-day event packed with showcases, demos, partnerships, and conversations shaping the future of the global economy. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ ✅ *Follow ETHConf* X: https://x.com/ethconf Website: https://ethconf.com _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 🎟️ Get your early bird tickets for ETHConf 2027: https://ethconf.com/2027#tickets 🎤 View the full ETHConf 2026 Speaker Schedule: https://ethconf.com/schedule _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _