DeFi and CeFi Differences

DeFi and CeFi Defferences – Crypto within financial sector never be separated from decentralized finance (DeFi), which offers the future of the world of banking that is open to use by anyone with a transparent system.

However, the widespread of crypto in the community also cannot be separated from the role of centralized finance (CeFi), which is convenience for new users who are just starting their journey in the crypto world.

So, what are the differences between DeFi and CeFi? 

What is DeFi ?

DeFi stands for Decentralized Finance, a blockchain-based financial application that operates without a centralized authority. This means DeFi can also be use for various financial services such as loan, exchanging assets, just like a normal financial services. However, DeFi can operates directly, without any interference from third party like banks.

DeFi applications was basically initiated by Ethereum blockchain and its smart contract technology. A smart contract is a term for a computer program written on top of the Ethereum blockchain.

With DeFi, all transaction processes were carried out by an open-source and transparent codes written in smart contracts. Users can verify the code from the application themselves. Thus, they have a complete control over their funds.

DeFi basically provides alternative financial services instead of the traditional financial system.