DeFi and CeFi


DeFi, short for decentralized finance, is a term for financial services on public blockchains, primarily Ethereum. DeFi enables you to earn interest, borrow, lend, trade assets and more, similarly to what banks provide - but it’s faster, has no middle-man, open to all and cheaper as you don’t have all the associated costs like a bank or Wall Street has. This has the potential to create more open, free, and fair financial markets that are accessible to anyone with an internet connection.

Here are some of the ways people are engaging with DeFi today:

  • Lending: Lend out your crypto and earn interest and rewards every minute.
  • Getting a loan: Obtain a loan instantly without filling in paperwork.
  • Trading: Make peer-to-peer trades of certain crypto assets — as if you could buy and sell stocks without any kind of brokerage.
  • Savings: Put some of your crypto into savings account alternatives and earn better interest rates than you’d typically get from a bank.

Do keep in mind that depending on which dapps you use and how you use them, your investment could experience high volatility – this is, after all, new tech.

CeFi, short for centralized finances, is to create crypto investment opportunities that offer some of the yield benefits of DeFi with some of the ease of use and security of traditional financial-services products. CeFi creates the potential for earning yield via crypto-based accounts that are similar to a traditional bank’s savings accounts, but may offer substantially higher returns. Do keep in mind unlike conventional savings accounts, cryptos aren’t currently government insured, so make sure you understand the risk involved.

Why should I care?

We live in a time where traditional savings accounts offer poor yields. With DeFi and CeFi you can get much better yields on your stablecoins and other cryptos while also getting loans that beat traditional banking services.