The Potential of the Paradigm: CeDeFi

CeDeFi represents a hybrid approach blending the benefits of decentralized finance with some aspects of traditional centralized systems. The paradigm is powerful as an alternative to conventional financial systems, differing from TradFi through their ability to offer a range of advantages for businesses and retail clients alike.

Where’s the potential?

From a business perspective, CeDeFi presents opportunities for enhanced efficiency, transparency, and accessibility in financial operations.

By leveraging blockchain technology, CeDeFi platforms can:

• streamline processes such as payments, lending, and trading, reducing the cumbersome costs and bureaucracy associated with traditional intermediaries
• enable broader financial inclusion by providing services to individuals and businesses worldwide, regardless of geographic location or socioeconomic status
• mitigate risks associated with smart contract vulnerabilities and governance challenges often encountered in pure DeFi environments
• leverage advancements in blockchain scalability solutions to accommodate growing user bases and transaction volumes without compromising performance

CeDeFi holds promise as an alternative to traditional financial systems, offering benefits such as efficiency, transparency, and inclusivity. But what about the challenges and drawbacks of this innovative hybrid?

The Drawbacks

At the heart of CeDeFi lies centralised finance (CeFi), a system built on trusted intermediaries such as banks and financial institutions. CeFi offers a robust regulatory framework and customer protection but can be slow and expensive.

On the other hand, decentralised finance (DeFi) operates on blockchain technology, removing the need for middlemen. DeFi offers enhanced accessibility, transparency, and autonomy, but it can be complex and lacks regulation.

Despite the potential advantages, CeDeFi faces several challenges, including regulatory hurdles, adoption barriers, and technological limitations:

• even though CeDeFi platforms allow users access to several critical decentralised features, for many, they require users to give up custody of their assets.
• many CeDeFi models rely on Ethereum, meaning that CeDeFi projects are by default associated with the risks and volatilty that comes with that.
• it’s essential to acknowledge that CeDeFi is not immune to scams. Due to the lack of regulations in this space, fraudulent projects based on this model will likely continue to arrive. Therefore, it is the user’s responsibility to be vigilant and only use regulated CeDeFi protocols that are well-known and well-established.

Fiat24 — a CeDeFi Project

At Fiat24, we are bridging the gap between DeFi and TradFi. We believe that regulation is necessary to protect investors and users, while embracing the cornerstone of decentralization’s pseudonymity.

We offer a cutting edge service that all DeFi players need. Holding a Fiat24 NFT gives users the opportunity to move seamlessly back and forth between the DeFi world and real-world without involving a centralized CEX or Brokerage.

Holdin a Fiat24 NFT with a status of “live” can, in the short term, give clients a Swiss bank account that seamlessly connects crypto assets and fiat assets. We hope that this NFT will become a type of digital access pass for all DeFi enthusiasts.

A verified Fiat24 NFT can prove that 1) the holder is a human, not a robot, 2) the holder is over 18 years old, and 3) the holder is not on any mainstream country’s sanctions and criminal list.

DeFi will not always be the regulatory vacuum it has been up until now. We believe that holding a Fiat24 NFT will eventually become a standard access pass with which to use many compliant DeFi protocols. It’s hard to imagine, for example, that citizens of heavily restricted countries (i.e. Iran and North Korea) will continue to be able to use Uniswap with ease in the future.