CeFi
Centralized finance is crypto services run by companies that custody assets, manage accounts, and provide trading, lending, or yield products.
CeFi, short for centralized finance, refers to cryptocurrency services operated by a company or organization rather than directly by decentralized smart contracts. In CeFi, users typically create an account, pass identity checks, and deposit funds into a platform that holds or manages the assets on their behalf. Common CeFi services include crypto exchanges, custodial wallets, lending platforms, payment apps, and brokerages that let users buy, sell, borrow, or earn interest on digital assets.
CeFi matters because it often makes crypto easier to access, especially for beginners who want familiar features like customer support, password recovery, fiat payment options, and simple order screens. The tradeoff is trust: users rely on the company’s security, solvency, rules, and internal accounting. For example, using a centralized exchange to buy bitcoin with a bank card is CeFi, while swapping tokens directly from a self-custody wallet through a decentralized exchange is closer to DeFi. CeFi can be convenient, but it introduces counterparty risk because the platform controls key parts of the process.
Other terms in CeFi
Centralized Exchange
A platform run by a company that lets users buy, sell, and trade cryptocurrencies through managed accounts and order books.
Crypto Loan
A loan that uses cryptocurrency as collateral or provides borrowed crypto or cash through a crypto lending platform.
Custodian (Crypto)
A crypto custodian is a service that holds and safeguards digital assets or private keys on behalf of users or institutions.
Margin Trading
Borrowing funds on an exchange to open a larger crypto position than your own balance would allow, increasing both potential gains and losses.