How are you all? Hope everyone is doing well, today we will know what CeFi is and how it works. Pros and cons, CeFi stands for Centralized Finance, And it is a financial system that is managed through a centralized or custodian platform, and it is like a traditional financial system where all financial transactions, crypto trading and other activities are controlled by a central authority, In simple terms, it is managed through platforms like a crypto exchange or bank,

How does CeFi work?

Generally, CeFi platforms are managed by a central authority,
As a result, they control the transactions, withdrawals, deposits, etc. of users,
And these platforms are banks or crypto exchanges,
For example, Crypto Exchange = Binance, coinbase, and all banks work in the same way,

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When users deposit their crypto or currency on the CeFi platform, the exchange sector or bank sector then the users' money or assets are transferred to them. It is kept in the platform's own wallet,
And when they make a withdrawal request, the platform authorities approve the withdrawal request,
CeFi platforms have to follow strict policies, users have to verify their identity when they create an account on these new platforms, so they have to create an account with all their personal information, such as KYC and AML and measures are taken against fraud, money laundering, illegal activities, and CeFi platforms are validated through these rules,

Some advantages of CeFi platforms

Since these types of platforms are controlled by a third party, there are many more advantages such as money being stolen from the account or forgetting the password, being a victim of hacking, transactions in the wrong account, help center, etc., in case of such problems, the authorities try to provide maximum support to the users,

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Some disadvantages of CeFi

If there are advantages to everything in the world, There will be difficulties, just like CeFi, the difficulty is that since the Cefi Platform controls the users' money, it can be stolen or hacked, as a result, there is a fear of those Cefi Platforms going bankrupt, as a result of which users can lose their money, or we often hear news of Exchanges, or banks going bankrupt or running away with money,

But there is a solution to this difficulty too, such as we have to choose a safe Cefi Platform, so that they can provide security to the users' money,

So I hope everyone understands that I am ending here today, everyone is well, Allah Hafez,