Why Defi is more likely to succeed by working with Cefi

Decentralized finance (Defi) positions themselves as a deceptive force of interest among institutions and auditors. The growing APR of Cryptocurrency is renowned for its decentralized architecture that challenges the modern model of financial markets. Currently, most global Sundays are centralized, meaning that a particular institution has control autonomy. 

While Defi has begun to provide financial freedom to the masses, it is slowly becoming apparent that central institutions also want a piece of cake. But how do they access this highly unregulated Sunday? This question encouraged stakeholders in Defi and traditional finance to discuss how the two worlds could work together. 

At first it seemed impossible to integrate Defi and Cefi, but recent developments suggest this could be the way forward. Some of the main areas of focus were on the value proposition of possible integration and Defi’s ability to place financial institutions in their current state. 

Resulting Intersection 
The idea of Defi and Cefi integration led to the creation of Cedefi architectures, crypto ecosystems that combine Cefi and Defi aspects. How is this possible? The answer lies in the compromise that both ecosystems must go. Defi may be a decentralized Sunday, but it lags behind in terms of compliance, liquidity and reliability. 

This is where cefi plays a role; traditional financial systems are known for their long-term compliance and high liquidity. Innovators in the crypto industry are beginning to understand that Defi can only succeed if the field is attractive to everyone, including the financial institutions involved. 

However, it is not surprising that stakeholders on both sides are starting to see a value proposition in Cedefi. Binance pioneered this type of architecture when it introduced the Binance smart chain (BSC), a cedefi ecosystem that decoupled the liquidity gap between cefi and Defi. 

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