DeFi and CeFi Differences

What is CeFi ?

CeFi stands for Centralized Finance, which means a financial services with centralized structure. In other words, CeFi has third party interferences like banks or traditional financial institutions.

CeFi also provides various financial services such as crypto exchange, interest from deposited crypto assets, loan, and so on. However, CeFi runs by a company in general and not using an open-source smart contracts.

By using CeFi means, we seek a company help to make DeFi transactions and pay a fee for their services.

What is a Differences Between DeFi and CeFi ?

They are both financial services with their own respective advantages and functions.

However, CeFi is sometimes misinterpreted with TradFi, which stands for traditional finance a financial service we are familiar with, including Banks.

If you’re still wondering the differences between the three of them, check out the example below :

Function	DeFi	CeFi	TradFi
Spot Trade	UniSwap	Coinbase	New York Stock Exchange, NASDAQ
Derivatives trade	dYdX, GMX	Bybit, FTX	Chicago Mercantile Exchange
Asset management	The Index Co-op, Yearn	Galaxy, Grayscale Bitcoin Trust	BlackRock
Lending	Aave, Compound	Celsius, Nexo	Bank of America