Defi and Cefi are popular acronyms for decentralized finance and centralized finance. Of late, both these platform-types have expanded their popularity riding on the back of a new range of solutions enabled by a wide variety of digital assets. Before moving into the comparative benefits and drawbacks of these platforms, let us have a quick look at what DeFi and CeFi actually imply.
DeFi: DeFi Solutions offer decentralized protocols, platforms, and services that have completely removed the scope of traditional intermediaries, such as banks and government-backed financial institutions, from any type of transaction dynamics.
CeFi: CeFi or centralized finance strikes a middle ground. It offers financial services aimed at bridging the gap between the platforms of legacy finance and the new economy of digital assets. It does not do away with the role of intermediaries while dealing in both digital assets and fiat currencies.
DeFi advantages | CeFi advantages |
P2P | Easy to use |
Transparent | Wider range of finance services |
Trading | Share the security risks |
DeFi drawbacks | CeFi drawbacks |
Regulatory risks | Autonomy |
Prone to scams | Regulatory requirements |
Irrespective of their merits and drawbacks, the rise of DeFi and CeFi has unitedly encouraged a lot of crypto services to flourish. One of the most significant of these services has been crypto lending. The rise of cryptocurrency lending platforms has made convenient crypto loans available for a wide range of users. Moreover, lending cryptocurrency has also been beneficial for people who don’t want to have their crypto holdings sit idle.
Coinrabbit is one of the top crypto lending platforms that can arrange for instant crypto loans, without any credit check or registration, at a very low rate of 14% APR. The crypto lending programs of Coinrabbit start from as low as 100 USDT going up to any sum the borrower wants to take. To borrow, one can use BTC or ETH as collateral. While repaying the cryptocurrency loan, the user pays interests at a fixed rate of 5% irrespective of the prevailing rate of the BTC or the ETH. The interest is charged only during repayment without burdening the user with monthly installments.
It can be reasonably assumed that the flourish in both DeFi and CeFi ecosystems would encourage many such cost-effective and efficient services and solutions to come up in the future.
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