Why DeFi Not CeFi

DeFi is expected to provide seamless services in a Trustless way in which CeFi(regular bank service) can’t provide for us. The issue we have always had with bank is trust and security, if you have to trust a platform and hope that they don’t disappoint you, then you half way into not have a peaceful night towards your funds and money. Banks have been operating for years, they have spent years to create trust between their customers letting their customers think that they can be relied on. Higher percentage of people will rather leave their money in the bank or have it elsewhere because Banks over the years have created more positive for their operation than the negative PR.

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Lots of banks have shut down with lots of people losing their money, but you don’t see people complain and say they are going to stop using banks. They just have to hope their banks don’t shut down someday with their money trapped inside. The bank is known for having people deposit their money into their establishment, then the money deposited by customer will be used for investments by the bankers. They might invest through lending their money to people at certain interest rates. Because people constantly transact everyday, it’s near impossible to run out of liquidity, but then, anything can happen like mismanagement of funds.

So what’s the best way to make sure you are constantly in control of your funds, this is where Decentralized Finance come to play. In crypto, we hope more on smart contract to help us make transactions. This way we don’t have to rely on some certain human errors like greed and being scandalous. Smart contract should never be underrated, this is why lots of people are in this crypto space because they want to have control.

Posted Using InLeo Alpha