Platforms listed under the Centralized Finance (CeFi) category must meet the following criteria:
- core business is to provide buy/sell/trade/swap services of crypto assets.
- mandate KYC process for sign-ups
- hold custody of crypto assets on behalf of users
List of CeFi platforms covered on this site
Crypto exchange platforms
Crypto exchange platforms are similar to online brokerages: they are essentially online marketplaces to buy and sell cryptocurrency. You can either deposit fiat currency (money regulated by governments) and exchange it for cryptocurrencies, or you can trade cryptocurrencies for other cryptocurrencies.
Centralized platforms are more common, run by an intermediary, and usually require some form of KYC identification checks.
What is Centralized Finance (CeFi)?
In centralized finance (CeFi), all crypto trade orders are handled through a central exchange. Funds are managed by the business entity running the central exchange. It means you don’t own a private key that provides you access to your wallet.
Moreover, the exchange identifies which coins they list for trading or how much fees you need to pay to trade with their exchange.
Moreover, you are subject to the rules a centralized exchange imposes on you. Also, you are subject to the rules set by the centralized exchange.
If you put your money on a cryptocurrency exchange or wallet, you are giving the exchange control over your coins. This is good if you don’t wish to have the responsibility of keeping your private keys safe.
Considerations before opening an account
Some factors affecting the choice of platform:
- Blockchain support
- exchanges that support transfers over alternative blockchains might offer cheaper withdrawal options.
- depositing/withdrawing fiat and crypto
- trading fees
- Funding options
- does it support fiat funding?
- Order types
- some exchanges only support market orders. Others targeting professional traders offer more advanced order types like limit, stop loss etc.
- Security protocols
- Trading pairs available
- Trade & transfer limits