2 research outputs found
CeFi vs. DeFi -- Comparing Centralized to Decentralized Finance
To non-experts, the traditional Centralized Finance (CeFi) ecosystem may seem
obscure, because users are typically not aware of the underlying rules or
agreements of financial assets and products. Decentralized Finance (DeFi),
however, is making its debut as an ecosystem claiming to offer transparency and
control, which are partially attributable to the underlying integrity-protected
blockchain, as well as currently higher financial asset yields than CeFi. Yet,
the boundaries between CeFi and DeFi may not be always so clear cut.
In this work, we systematically analyze the differences between CeFi and
DeFi, covering legal, economic, security, privacy and market manipulation. We
provide a structured methodology to differentiate between a CeFi and a DeFi
service. Our findings show that certain DeFi assets (such as USDC or USDT
stablecoins) do not necessarily classify as DeFi assets, and may endanger the
economic security of intertwined DeFi protocols. We conclude this work with the
exploration of possible synergies between CeFi and DeFi
SoK: Blockchain Technology and Its Potential Use Cases
Bitcoin's success has led to significant interest in its underlying
components, particularly Blockchain technology. Over 10 years after Bitcoin's
initial release, the community still suffers from a lack of clarity regarding
what properties defines Blockchain technology, its relationship to similar
technologies, and which of its proposed use-cases are tenable and which are
little more than hype. In this paper we answer four common questions regarding
Blockchain technology: (1) what exactly is Blockchain technology, (2) what
capabilities does it provide, and (3) what are good applications for Blockchain
technology, and (4) how does it relate to other approache distributed
technologies (e.g., distributed databases). We accomplish this goal by using
grounded theory (a structured approach to gathering and analyzing qualitative
data) to thoroughly analyze a large corpus of literature on Blockchain
technology. This method enables us to answer the above questions while limiting
researcher bias, separating thought leadership from peddled hype and
identifying open research questions related to Blockchain technology. The
audience for this paper is broad as it aims to help researchers in a variety of
areas come to a better understanding of Blockchain technology and identify
whether it may be of use in their own research.Comment: Technical repor