Each generation has its own P2P.

Author: Duked Fintech

P2P is actually a neutral term. It describes an ancient action, and also the essence of finance: one person needs money, another has idle money, and the two directly engage in lending.

But this action has a natural tension. When there are few people, it relies on acquaintance. When there are many people, it relies on an intermediary. Once an intermediary appears, people are no longer direct with one another.

Hui, Tai Hui, CreditEase, DeFi, RWA — all are names for the same action in different eras. The form changes, and the technology changes, but the underlying question has never changed — when money is placed in the hands of strangers, on what basis do we feel assured?

Human financial needs are eternal and unchanging, but financial service models constantly change and renew. Each generation has its own P2P.

I. Cheng Hui: Familiar Faces One by One

Yueqing, Wenzhou, Zhejiang. A "Cheng Hui" is underway.

The hui leader is a person of standing in the village, and the hui members are his relatives, friends, and neighbors. Each person contributes a sum of "hui money" per period, which is pooled and then used by one person in turn. Whichever family needs to build a house, or whichever family needs to take a wife, can raise money this way. Wenzhou's Municipal Gazette records it very plainly: "Urgently in need of money, with no way to borrow, one therefore invites relatives, neighbors, and friends to form a hui."

Trust comes from day-after-day interaction, from "I have known this person since childhood." Finance here is not abstract numbers, but concrete faces one by one.

Around 1985, Wenzhou's private economy rose, household workshops blossomed everywhere, and bank credit did not reach individual households and small factories. The demand for funds far exceeded the scale that circles of acquaintances could supply. Tai Hui emerged in response. "Tai" has two meanings: to raise interest, and to raise the hui amount. From a "single ten-thousand hui" it was raised to a 100,000 hui, a 500,000 hui, a 1,000,000 hui.

Later on, when the money came in, it was no longer counted one note at a time, but rather "measured with a ruler, or weighed on a scale." A mutual-aid mechanism based on acquaintance trust swelled within a few months into a pool of funds whose full shape no one could see clearly. In the spring and summer of 1986, the funding chain broke, and the hui leaders absconded.

This mechanism was very close to ordinary people's lives. When I was little, my mother told me that my grandmother had a very difficult period, precisely because a hui leader ran away. Such things affected many ordinary families.

Hui operated for hundreds of years by relying on credit among acquaintances. But as more and more money was pooled and the participants became more and more distant, "I know him" slowly became "I trust the hui leader." Who borrowed the money, who could repay it, and whom to seek out if something went wrong all fell onto the hui leader.

The hui leader's reputation could gather the money, but it might not be able to fill the hole when the hui collapsed.

In the end, the "Wenzhou leather factory" went bankrupt.

II. CreditEase: From Individual to Platform

In 1997, Tang Ning went to Bangladesh to find Yunus. What he saw was the most plain scene of Grameen Bank: a woman in a village borrowed a small amount of money to buy raw materials, repaid it through labor, then borrowed and repaid again.

Nine years later, Tang Ning founded CreditEase in Beijing. The early approach was very plain: lending in his own name as the first lender, then splitting and transferring the creditor's rights. Investors trusted not the "system," but "Tang Ning the person." He used his background in Peking University's mathematics department and on Wall Street as the credit guarantee for this model.

Tang Ning himself was that "intermediary," just like the hui leader of Tai Hui. The difference was that he was trained, had Wall Street experience, and turned lending among acquaintances into a business that could be promoted to more strangers.

At roughly the same time, the other side of the world was doing the same thing. In 2005, in London, four young people founded the world's first P2P online lending platform, Zopa. In 2006, Lending Club was founded in the United States. Their narrative was also "giving credit to people whom banks do not serve." But in 2016, Lending Club ran into trouble. An internal review found that $22 million in loans had been improperly sold, and the founder and CEO resigned.

This incident showed people that platforms also have their own interests. They do not merely let borrowers and lenders meet; they also decide which loans are sold to whom. Investors need to trust not only borrowers, but also the platform that selects loans on their behalf.

In 2015, Yiren Digital rang the bell at the New York Stock Exchange, becoming "China's first P2P stock." Before investors' eyes, in addition to Tang Ning's resume, there was now also the signboard of a listed company. Over the following decade and more, CreditEase's business was no longer limited to P2P, and its products and transaction structures became increasingly complex.

Looking back more than ten years later, that sound of the bell seems like the opening of an era, and also like the end of an era.

On the evening of October 11, 2026, CreditEase pushed an apology letter to investors in quasi-fixed-income products through its app. The letter admitted that multiple businesses of the group were losing money, that the value of market-based asset disposals was low, that there was a lack of effective sources of funds, that quasi-fixed-income products had substantively defaulted, and that it "may already be insolvent."

Four months had passed since the May 22 announcement of a full suspension of redemption. Investors waited four months, did not receive a redemption plan, and received only one sentence: it may already be unable to repay.

There is another sentence in the apology letter worth reading repeatedly. The legal due diligence institution stated that it could not independently investigate the compliance of the quasi-fixed-income products based on materials such as the transaction channels and models provided by the group.

Twenty years in business, from one person, to a listed company, and then to a structure that cannot be seen through.

III. Blockchain — From Wild to Institutional

In 2014, Dr. Xiao Feng of HashKey said in a speech: "The internet will not overturn the demand for financial services; what it will overturn is the institutions of financial services." In an earlier speech, he quoted a more concise formulation: "Human financial needs are eternal and unchanging, but financial service models constantly change and renew."

In 2014, Dr. Xiao Feng of HashKey said in a speech: "The internet will not overturn the demand for financial services; what it will overturn is the institutions of financial services."

In an earlier speech, he quoted a more concise formulation: "Human financial needs are eternal and unchanging, but financial service models constantly change and renew."

Hui, Tai Hui, CreditEase, Zopa, Lending Club — the forms change, but the underlying thing — turning savings into investment, transferring value from one person's hands to another's across time and space — has never changed. What changes is who bears the risk, who records it, and who explains it.

The question is: if the platform has become a black box, can the platform also be removed?

In 2009, Bitcoin gave a radical answer. Trust was written into code, rather than placed in some institution.

Then came ten years of DeFi, from wild to institutionalized.

In 2022, Luna/UST tried to have an algorithm maintain a U.S. dollar peg. The Anchor protocol offered nearly 20% annualized yield, and LUNA's market value once reached $41 billion. Then the death spiral began. UST depegged, LUNA's supply exploded, the price fell further, and the cycle returned to the starting point. LUNA fell from nearly $90 to $0.00017 within a few days, and tens of billions of dollars evaporated.

The algorithm specified how to adjust when the price deviated, but it could not stop everyone from losing confidence at the same time. The rules originally used to maintain stability instead accelerated the collapse.

This is reminiscent of the hui collapses of those years. On ordinary days, everyone believed the next round could keep turning. Until one day, everyone wanted to take their money back at the same time.

After Luna's collapse, DeFi went through a period of contraction. But what truly changed the situation was not technological iteration within DeFi, but traditional financial institutions beginning to enter on their own.

Now, another group of names is beginning to appear on-chain: BlackRock, JPMorgan, Franklin Templeton. What they bring are government bonds, money market funds, and custody and management arrangements that have already been running for many years. Research by Bernstein shows that by 2026 the RWA market had risen to about $51 billion.

The wild narrative of DeFi 1.0 was "bypassing banks"; today the narrative of RWA is "letting banks themselves go on-chain." The technology that once sought to bypass financial institutions is now being used by financial institutions.

Behind these products, managers, custodians, and technology platforms still each have their place. Intermediaries have not disappeared; they have merely redistributed the work.

This time, what comes on-chain are the financial institutions we are already familiar with.

The names are familiar, and the rules are also more numerous. But trust still needs someone to bear it.

IV. The Essence of Finance

Jevons wrote about a counterintuitive phenomenon: steam engines became more coal-efficient, yet total coal consumption instead increased. After efficiency improved, more uses also appeared.

The development of financial technology brings this to mind. Organizing a transaction is becoming easier and easier, and money can therefore flow to more people and farther places.

The money of hui circulated among relatives, friends, and neighbors; platforms connected people who had never met; and on-chain protocols allowed funds to cross national borders. As more and more people participate, when one place has a problem, the places it affects may also become more and more distant.But the risk did not disappear. It merely migrated from an old form to a new one, and because the scale is larger and the chain is longer, a single shock actually spreads more widely.

Technology can make money move faster and transactions reach farther. But whether borrowers can repay, whether those managing money for others might have other plans, and whether money that has run into trouble can still be recovered—these questions have always been there.

Each generation has its own P2P.

From the face of the hui head, to the signboard of the platform, to the code on the chain, we have always been looking for a way to let strangers safely entrust money to one another.

There are more and more methods. Trust, however, remains very difficult.