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DeFi vs CeFi: A Comprehensive Comparison Guide

Vitaliy Basiuk
Alissa Adams
Editor Fact checked
April 25, 2023 | UPD: June 12, 2024 | 12 mins min. reading | 739

DeFi vs CeFi: A Comprehensive Comparison Guide

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What's the difference between CeFi and DeFi?

The primary distinction between centralized and decentralized finance is that one has a mediator in the form of KYC in place, whereas the other does not. Another significant distinction is that centralized finance offers customers less privacy than DeFi transactions.

Is Bitcoin a CeFi or DeFi?

Bitcoin is the definition of DeFi. Satoshi Nakamoto’s major pitch when introducing the Bitcoin whitepaper to the world was to provide a decentralized peer-to-peer transaction style to the banking world. Aside from that, when comparing centralized to decentralized financing, CeFi requires KYC verification; therefore, founders must be public.

Which is better, CeFi or DeFi?

Each option has merits and disadvantages. While CeFi offers fund security and fair exchange on those funds, DeFi aims to keep the space free of incursion. DeFi allows investors to implement their strategy without having to deal with an intermediary. Even though incidents such as FTX occur in the CeFi sector as a result of specific malpractices, DeFi continues to face a number of hurdles and challenges.

Written by
Vitaliy Basiuk
CEO & Founder

Written by Vitaliy Basiuk
CEO & Founder at EvaCodes | Blockchain Enthusiast | Providing software development solutions in the blockchain industry

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