DeFi vs. CeFi: Pros, Cons and Who Wins?

After the collapse of FTX in 2022, the question of “DeFi vs. CeFi” has become more urgent than ever. Can centralized exchanges (CeFi) be trusted, or only DeFi offers real security?

CeFi: Central Exchanges

CeFi (Centralized Finance) includes: Coinbase, Binance, Kraken, Bybit. Advantages: simple user interface, high liquidity, customer support, insurance (sometimes). Disadvantages: “Not your keys, not your coins”. The FTX disaster proved that even large exchanges can collapse.

DeFi: Decentralized Protocols

DeFi (Decentralized Finance) includes: Uniswap, Aave, Compound, Curve. Advantages: full control of the assets, transparency, there is no single owner who can collapse. Disadvantages: complex interface, smart contracts can be hacked, no customer support.

FTX: a painful lesson

The collapse of FTX in 2022 proved: even an exchange that looks secure can use customer assets for its own needs. “Proof of Reserves” is not enough without an independent review.

Recommendation

Money not in active use: cold wallet. Money to use: regulated CeFi exchange (Coinbase) + DeFi for some of the activity. Compare Coinbase and Binance.

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