The concept of #cedefi is the extension and the upgrade of CEXs.
Originally, DeFi and staking projects all built their own pools to provide incentives to attract users to stake or provide liquidity through LP tokens. However, this incentive mechanism has stagnated. Everyone knows how to play the game, so the #Rewards are marginalized.
What CeDeFi essentially brings, is the transformation of regulated #custody becoming a secondary exchange.
The advantage is that projects get more flexibility and opportunities in handling the assets of its users. It opens the doors for financial instruments that require deep liquidity not found in DeFi. You can do #OptionsTrading and #Arbitrage on a large scale. Just what BounceBit and Ethena are doing.
As the name suggests, CeDeFi, naturally violates the principle of decentralization. Nevertheless, it undoubtedly has its place in crypto.
Money flows towards yield opportunities, regardless of decentralized or not. So stay on the lookout for projects that utilize CeDeFi infrastructure to provide what people are really looking for: sustainable yield
