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September 9, 2021

Get to know CeDeFi, the New Era of the Financial System After DeFi

 Before this, our team told a brief story about AllianceBlock (ALBT) and Unizen (ZCX) in relation to CeDeFi, the latest sector that is starting to steal the attention of professionals.

This article will briefly dive deeper into CeDeFi.

CeDeFi Background

CeDeFi is the latest technology in the blockchain world, also known as Centralized Decentralized Finance. It combines traditional or centralized finance (CeFi) with decentralized finance (DeFi), making CeDeFi a hybrid system.

While the adoption of DeFi is expected to be fully accepted along with clear legislation in 2022, CeDeFi is expected to be the next trend.

The idea started with an experiment from Binance founder Changpeng Zao (CZ) through integration between a centralized platform, Binance Smart Chain (BSC) with DeFi.

Arguably the presence of CeDeFi is to speed up the DeFi technology system. In fact, the term ‘CeDeFi’ itself was actually triggered by CZ in September 2020.

What is CeFi?

It’s the opposite of DeFi, where there is no use of smart contract code in the blockchain. Users only rely on a centralized intermediary for all operations performed.

Includes several services such as:

Basic exchange

Lending on exchanges such as Bitfinex

Staking on the exchange

DeFi Summary

No early sales

Issue new tokens that investors receive through the use of the product

In connection with smart contracts, without involving intermediaries such as CeFi

Administration is managed by the community through token ownership

Examples: Yearn Finance (YFI), Uniswap (UNI), Aave (AAVE), Compound (COMP)

Through the combination of CeDeFi, the maximum functionality of a centralized and decentralized financial system can be utilized and offered simultaneously.

The benefits of CeDeFi can be detailed through four things (see BSC + DeFi as a close -up example):

Low risk

All projects listed on the BSC have been detailed, audited, and compliant with the law.

Cheap transaction costs

The value offered is much lower than the transaction costs on the DeFi platform.

From here, users can take advantage of CeDeFi infrastructure through the use of DeFi protocols such as liquidity aggregation, yield farming requirements, and borrowing protocols at a lower cost.

More suitable for developers

Developers are offered to develop and launch smart contracts on Ethereum at a cost according to their wishes. Their projects can also be tested at a lower cost.

Easier to access

If a large number of projects are difficult to access to users who do not have extensive knowledge of DeFi causing difficulties in networking, CeDeFi facilitates new users through easier access to these projects with enhanced benefits such as security, control, and transparency.

Maybe the reader already has a little idea of ​​CeDeFi. You can also read the article on AllianceBlock (ALBT) and Unizen (ZCX) to get to know the two platforms that focus on CeDeFi.