Great exclusion: Cryptocurrency against centralized finances (Defi) in a decentralized exchange era
The financial world has changed dramatically in recent years. Cryptocurrencies, Blockchain technology and dexs (Dexs) carpet changed our thinking about money, trade and financial instruments. The two most prominent changes in this space are centralized finance (Defi) and cryptocurrency exchange (CEX). Although both offer interesting opportunities for investors and merchants, they are very different in terms of their basic principles, benefits and disadvantages.
Centralized funding (Defi)
DOFI, also known as decentralized funding, is a financial technology operating completely non -traditional centralized systems. Defi platforms use blockchain technology to provide access to financial services such as lending, borrowing, trade and investment. The most well -known examples of Defi are the following:
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- Makerdao
(EOS): Decentralized lending platform, allowing users to borrow and lend tokens.
- Compound (BTC/ETH): Decentralized interest rate management platform.
The main features of the Defi are:
* Decentralized Management : Participants’ decision -making is distributed by reducing the risk of centralization.
* Undefled contracts : Smart contracts for Blockchain ensure execution of agreements without intermediaries.
* Cross -circuit interaction : Ability to transfer property in different block circuits.
* Low taxes and liquidity : lower operating costs and increased trading volumes.
Arguments:
- Increased security : Defi platforms are more resistant to burglary and censorship due to their decentralized nature.
- Lower operation fees : Operation fees are usually lower compared to centralized exchanges.
- Improved user experience : Decentralized technology provides greater flexibility in terms of user interface, suitability and application.
Disadvantages:
- ** Limited liquidity.
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- Regulatory uncertainty : The regulatory environment is still developing, and Defi platforms may face challenges in accordance with applicable laws and other legal acts.
Centralized funding (CEX)
Traditional centralized funding (CEX) operates through a network of banks, investment firms and other financial institutions, which acts as intermediaries between investors and financial markets. CEXS provides access to financial services such as trade, borrowing and investment, but with centralized control structure.
The main characteristics of CEX are:
* Centralized infrastructure : banking system, financial institutions and investment companies provide liquidity and care for assets.
* Regulatory supervision : Governments regulate and execute compliance with laws and other legal acts.
* Institutional knowledge : Professionals have extensive experience in managing risks and making reasonable decisions.
Arguments:
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- Compliance with regulation : In a centralized environment, it is usually easier to comply with applicable laws and other legal acts.
Disadvantages:
- Centralization Risk : CEX is a violation of centralized control, which can increase the risk of manipulation or burglary.
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