Traditional Finance vs Decentralized Finance vs Centralized Finance

[Suba]

If we observe, we will find a striking difference between Traditional Finance (TradFi), Decentralized Finance (DeFi) and Centralized Finance (CeFi).

TradFi is a financial system and product from traditional institutions such as banks and non-bank financial institutions and investment companies. How TradFi works is also regulated by the government and central bank.

DeFi operates on a blockchain that implements smart contracts so that users do not have to comply with strict rules, such as KYC and AML

CeFi also offers services like DeFi, but users must access through a centralized exchange and comply with all regulations and verify personal data, so CeFi is more similar to TradFi. What do you think?

 

[Nomad]

decentralized finance cannot exist on its own. your decentralized money still need fiat value. However, centralized finance can exist alone

 

[magnus2022]

Decentralization is surely the rave of the moment, though it can be used to exploit and scam people. Centralized finance is more secured than DeFi.