CeFi

CeFi, or Centralized Finance, refers to the traditional financial services surrounding cryptocurrencies, where centralized institutions, such as exchanges and lending platforms, control and manage the transactions. Unlike decentralized finance (DeFi), where smart contracts and blockchain protocols facilitate transactions without intermediaries, CeFi platforms rely on centralized entities to provide liquidity, handle user funds, and ensure compliance with regulations like KYC and AML. While CeFi offers advantages like customer support and easier access for mainstream users, it also carries risks associated with centralization, such as data breaches, hacks, or potential misuse of funds by the platform. Examples of CeFi platforms include Binance, Coinbase, and Kraken, where users can trade, lend, or borrow crypto with the assurance of centralized control.