Thursday, November 26, 2020
Home News BTC The Key to DeFi Entering a New Level Is CeFi

The Key to DeFi Entering a New Level Is CeFi

CeFi and DeFi, these two concepts seem to be absolutely opposite from the day they were created. Especially at the moment, DeFi in the cryptocurrency space is growing day by day in terms of market cap and product diversity. Will DeFi be a more advanced form of financial service and eventually replace CeFi?

The answer may be the opposite. Not only will CeFi not be replaced by DeFi, but it is also even the key to DeFi entering the next stage of development. The reason is due to the current difficulties and challenges faced by DeFi.

Compared with the long-existing CeFi, DeFi is an emerging form with complex business models and cumbersome operation processes, making it difficult for users to get started.

Taking participation in liquidity mining as an example, users need to download a decentralized wallet, access to DEX, enter the contract address and wallet address, and constantly compare Gas fees and benefits. A small mistake in any one step may cause a lot of losses to the user.

However, this is where the advantages of centralized exchanges lie. After long-term development and the investment of a large amount of resources, CEX, especially leading exchanges like OKEx, has built a mature and easy-to-operate system.

OKEx Earn has now integrated several mainstream DeFi projects, including Uniswap, YFII, COMPOUND and CURVE, etc., allowing users to participate in DeFi mining or lending by 1-click. Besides, users don’t have to pay an expensive gas fee when participating through OKEx.

Another major challenge of DeFi lies in hackers and scammers. Although this is a common problem in crypto space, for hackers, the emerging DeFi teams with limited resources and large amounts of locked funds are undoubtedly the best objects, the same for scammers, who will never miss any opportunity to defraud property.

The entry of the CEX with a high reputation will curb this phenomenon. Only through due diligence will the exchange decide to list or integrate a DeFi project, which makes the projects that land on the centralized exchanges are more likely to be more reliable in terms of technology and credit. After all, it is far more difficult to deceive an industry leader than to deceive retail traders.

In a nutshell, DeFi and CeFi are by no means antagonistic: CeFi can help DeFi develop faster and better, and DeFi has a better performance in privacy and innovation. Both have their own fields.

About the Author: Jay Hao is the CEO and Chief Customer Service Officer at OKEx, a leading crypto spot and derivatives trading platform.

Image by Photo Mix from Pixabay

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