One of the most important reasons for the recent growth of the cryptocurrency market has been the increasing spread of DeFi (Decentralized Finance) – a technology that allows users to place deposits on the blockchain or borrow against cryptocurrency collateral, and do so completely anonymously. While DeFi is actively developing, the mass demand for it has also revealed complexities, which has led to the emergence of centralized banking platforms representing the opposite ideology of Centralized Finance (CeFi).

Their functions are similar to DeFi protocols, but they are easier for the average user to understand how they work, and some of the problems associated with DeFi are absent in them. Their concept differs little from conventional banking services, making them more familiar to a wider audience than complex DeFi systems, and since they don't interact with multiple smart contracts, fees can be significantly more attractive.

Although centralization is what blockchain initially tried to move away from, its return became inevitable due to the growing popularity of cryptocurrencies. The fact that CeFi platforms are centralized provides security for users' funds, as they are usually stored in cold wallets outside the system and hackers cannot access them – only current payments are processed using "hot" wallets, so they hold relatively few funds.

Moreover, since the platform is centralized, it can be held accountable if an incident does occur. This also allows it to provide user support and guarantee static interest rates.

DeFi and CeFi have their own pros and cons, and it's likely that these solutions will coexist in parallel in the coming years, meaning one will not be able to displace the other. CeFi is a more attractive option for a wider audience who need a simple and secure way to earn on their cryptocurrency savings.