Community Forex Questions
What are the difference between DeFi vs CeFi investments?
CeFi and DeFi services offer different features that are specific to each group. Most CeFi projects, for example, provide custody solutions and have dedicated customer service teams, which are generally not available in DeFi.
Typically, centralised exchanges charge higher fees to maintain the platform, pay staff salaries, improve their products, and other costs. DEX platforms, on the other hand, are less expensive to trade on because they do not provide custody services and do not have a team involved in the governance process. In general, fee revenue is split between liquidity providers and token holders who choose to stake their tokens. Uniswap, a crypto swap platform that distributes funds from fees among liquidity providers, is one example.
When the first crypto exchanges enabled fiat conversions, there was no regulation because governments did not fully comprehend Bitcoin and blockchain. Nonetheless, most jurisdictions are now attempting to regulate crypto operations, either directly or indirectly. As a result, one of the reasons why most CeFi platforms require KYC verification is because of this. Coinbase is registered with the Securities and Exchange Commission (SEC) in the United States, while other global platforms have relocated their headquarters to crypto-friendly jurisdictions such as Malta or Estonia. Meanwhile, the European Commission is in the process of developing the most comprehensive legal framework for cryptocurrencies. Overall, there are more jurisdictions associated with CeFi services.

Add Comment

Add your comment