DeFi is booming, and today the market is filled with all kinds of borrowing and lending protocols, many of which compete with one another on the basis of providing users with meteoric yields.
Today's most promising DeFi apps all share a similar vision for the future: The creation of a divergent financial system where capital and data flows more equitably, shifting control away from institutions and towards the individual.
There isn't a straight path from point A to point B. The most popular DeFi apps are still dwarfed by most centralized exchanges, which wield outsized impact and influence within the cryptocurrency and blockchain space.
By focusing on delivering a superior user experience in tandem with top-notch security, centralized exchanges essentially live or die based on their ability to "Create trust" among their users.
Whereas today's DeFi protocols can be notoriously difficult to understand and access, over the years, centralized finance platforms have gradually become more accessible and multi-dimensional, with sophisticated order-matching engines, asset custody and stable technology.
Rather than driving the market as innovators, centralized exchanges will gradually settle into a role as an infrastructure provider for trailblazing projects.
Ultimately, centralized exchanges are a transient product that will provide users with a bridge to the world of DeFi.Here's what we think will happen next: CeFi players will continue to lower the barriers to entry for DeFi and DeFi-like projects, allowing their users to sample the benefits of DeFi, while retaining the liquidity, security and stability the users are accustomed to with CeFi offerings.
Once these proof-of-concept projects are "Verified" by the market and the DeFi model proves to be successful, then market demand will follow.
We are committing a $100 million accelerator fund for DeFi projects on Binance Smart Chain, a smart contracts-enabled blockchain that allows developers to build decentralized apps and digital assets.
DeFi provides the terminal trajectory for the future of crypto.
CZ: Why the Days of Centralized Exchanges Are Numbered
Published on Oct 29, 2020
by Coindesk | Published on Coinage
Coinage
Mentioned in this article
Recent News
View All
Blockchain Bites: Bitcoin's Run, Uniswap's Hemorrhaging Value, Anchorage's Banking Bid
Bitcoin is nearing all-time highs in price and market cap last set three years ago.
Japan's megabanks to lead experiment with digital yen
We have, in order, Cheese Bank with a $3.3 million theft, Akropolis with its $2 million loss, Value DeFi with a whopping $6 million exploit and finally Origin Protocol's loss of $7 million.
Number of new Bitcoin addresses spikes amid growing FOMO
Japan's three largest banks, as part of a group of 30 private sector actors, are set to collaborate on an experiment with a digital yen.
Not just Wall Street: Quant trader explains why Bitcoin price is going up
Sam Trabucco, a quantitative trader at Alameda Research, believes four general factors are pushing up the price of Bitcoin.