How does traditional finance work?

The core logic is actually very simple. Bonds, fixed-rate loans, structured products—these things have existed for so long because of three reasons:

You need to know what the costs are. How much return you can get. Only then can you properly plan how to allocate funds.

This is not some profound knowledge. Institutional investors operate this way. They don't gamble, and they don't touch ambiguous things. Every penny invested has its cost and return clearly laid out.

This approach is worth learning from.