CeFi
Centralized finance: traditional crypto services — exchanges, lending, interest accounts — run by a company that holds your funds.
CeFi (centralized finance) is the familiar way most people use crypto: an exchange like Binance or Coinbase matching trades, custodial wallets, and interest-bearing accounts operated by a company that controls your coins.
CeFi vs DeFi
CeFi is convenient — easy signup, customer support, simple interfaces — but requires trust. The platform holds your private keys and can freeze withdrawals (or, historically, lose billions in collapses). DeFi moves that trust onto code.
Why it matters to decentralization
CeFi platforms are points of extreme concentration: custody of user funds and outsized validator power. When W3D measures capital decentralization, exchange balances are a major factor pulling scores down.
Related terms
DeFi, Exchange, Custody, Stablecoin, Wallet