DeFi vs. CeFi - the ultimate showdown
In the fight between DeFi and CeFi, who could be the winner? You can check it out.
DeFi is often called the future of financial institutions, but there are still some significant drawbacks of DeFi services such as lack of regulations, high cost of transactions, vulnerability, etc but these are negligible compared to CeFi drawbacks which are very significant such as Complete shutdown!!
Below are some of the reasons why DeFi is a better choice to majority!!
1. DeFi is better for asset management.
Although CeFi has been the go-to ecosystem for crypto asset management for years due to its liquidity and convenience, the risks are too significant to ignore.
2. Lack of control and autonomy.
CeFi's centralized nature means that individuals and institutions have limited control over their financial transactions and assets and rely on the centralized institution for their financial decisions and actions.
3 . The emerging DeFi sector offers some great alternatives that give institutional investors more control over their funds while taking security into their own hands.
4. DeFi platforms offer higher transparency and security, building on the promise of decentralization.
5. Accessibility: DeFi allows for the creation of financial products and services that can be accessed by anyone with an internet connection, regardless of their location or credit history.
6. CeFi is vulnerable to systemic risks
The history of CeFi platforms is loaded with catastrophic failures, from Mt. Gox to more recent examples like FTX and BlockFi.
CeFi platforms have demonstrated serious vulnerabilities, suffering from issues ranging from hacking to bankruptcy and causing significant losses to both retail and institutional investors. It seems that, unlike the traditional banking system, the crypto industry doesn’t have “too big to fail” services. The surprising collapses of Mt. Gox and FTX have revealed the weaknesses of the CeFi structure.
So, it seems it is a game over, and result announced 😁
