TradFi vs. CeFi vs. DeFi

 TradFi vs. CeFi vs. DeFi

12 May, 2022
6 mins

What is TradFi

“TradFi” is the short form for Traditional Finance. TradFi refers to the conventional means of money or asset management activities whose services are provided by banks, asset managers, insurance companies, real estate funds, etc. 

What is DeFi

“DeFi'' is short for Decentralized Finance. DeFi is a public financial sector built on blockchain technology and leverages smart contracts to create financial products and services like those offered by centralized entities. DeFi aims to be a trustless system that eliminates intermediaries by building its products through open-source protocols that are censorship-resistant.

What is CeFi

“CeFi” stands for Centralized Finance. Itspurpose is to offer crypto investment products and services like those offered by DeFi while providing ease of use from TradFi. CeFirepresents the transition from TradFi to DeFi and offers a gateway between the two ecosystems. 

TradFi DeFi Table 1

Comparing Services

Let’s compare lending and borrowing services through the different platforms to visualize how they operate.

TradFi DeFi Table 2

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