Crypto What is Centralized Finance (CeFi)?

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There have been two types of financial system in the crypto space; the Centralized finance (CeFi) and the Decentralized Finance (DeFi). However, one has been into existence before the other one. Centralized finance was the standard for trading cryptos before DeFi was innovated.

CeFi handles all crypto trade offers through a central exchange. How? The user does not own a private key that provides access to the wallet. It is the duty of the exchange to recognize which coins to list and which ones not to list for trading or how much fee you need to pay to trade with their exchange.

Finally, when buying or selling via a centralized exchange, you do not own the cryptocurrencies. The rules given by the exchange will guide how you will operate on the exchange while trading. Examples of Cefi exchanges are binance, cpinbase and Diem. Binance is by far the communist one and most preferable

 

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In technology, blockchain advancement and emergence of cryptocurrency has given the world a new way of financial trading. Both centralized and decentralized finance includes aspects like trading cryptocurrency derivatives, providing cryptocurrency loans, and tokenising digital assets. Through the CeFi, all the crypto trading are routed. Centralized finance (CeFi) was the revolutionising technologies, it guarantees fund security and fair trade and acts by establishing trust along the route.