The problem with CeFi?
THERE ARE A NUMBER OF PROBLEMS WITH CENTRALIZED FINANCE (CEFI), INCLUDING:
Many CeFi institutions do not disclose all of their fees and charges, and their pricing can be opaque.
CeFi institutions can restrict access to financial services based on location, credit history, or other factors, which can lead to financial exclusion.
CeFi institutions often charge high fees for their services, which can be a burden for consumers and businesses.
Many individuals and small businesses do not have access to financial services due to a lack of infrastructure or prohibitively high fees.
CeFi institutions are centralized, which means they are vulnerable to hacks, outages, and other disruptions that can compromise the financial system.
Why DeFI ?
Decentralized finance (DeFi) is an umbrella term for financial applications and services built on decentralized networks such as blockchain. DeFi offers a number of benefits compared to traditional centralized finance (CeFi), including:
DeFi applications are built on decentralized networks, which means they are not controlled by a single entity and are less prone to hacks or single points of failure.
All transactions on a decentralized network are publicly visible, verifiable, and tamperproof, which increases transparency and trust.
DeFi eliminates intermediaries and streamlines processes through the use of smart contracts, which can significantly reduce costs and processing times.
DeFi is accessible to anyone with an internet connection and a smartphone, which increases financial inclusion and allows individuals to access financial services in areas where traditional financial institutions may not operate.
DeFi allows individuals to interact directly with each other, which eliminates the need for intermediaries and the fees associated with their services.