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CeFi vs DeFi
As you’ve probably already noticed, DeFi sounds a lot like the word “defy” and this isn’t an accident. Ethereum developers liked that the name implied defiance of the traditional financial system.
Sounds a little risky, doesn’t it?
So why would someone choose DeFi over CeFi?
Let’s take a look together…
Firstly and most importantly, DeFi is decentralized meaning that users are in complete control of their own finances. Central institutions cannot access their funds regardless of their countries’ political instability, inflation, debt, etc.
Banks, stock exchanges, and hedge funds are typically very heavily regulated which tends to be difficult for clients who must jump through hoops to qualify for a service. On the other hand, all that’s needed to access DeFi is an internet connection.
DeFi is open non-stop whereas CeFi relies on specific trading hours and governments which have the power to print money and shut down markets at will.
Financial transactions often come with high fees and can take days or weeks with traditional finance, whereas with DeFi the transactions can be completed in a matter of minutes and at much lower costs.
Additionally, contrary to banks and other lending institutions, services such as lending or borrowing are executed without delays and hidden fees on DeFi platforms.
Although DeFi hasn’t been around long it has already proven to be a worthy competitor to CeFi.
