CeFi (Centralised Finance) or DeFi (Decentralised Finance)?

The major players currently in the cryptocurrency industry who fall into two wide categories are CeFi and DeFi.

CeFi in a nutshell are corporations operate as lenders and taking custody of funds by mirroring traditional financial system putting the assets to work using cryptocurrencies as collateral. They also provide interest and loans for their clients, client support and two-factor authentication and other beneficial features. CeFi companies are Coinbase, Binance and Celsius network.

One of the biggest selling point of DeFi is that they do not rely on a third party. It consists of application of smart contract and it offers products like derivatives, insurance, flash loan and some others.

DeFi is becoming a hot spot for many investors without doubt. The total value locked in Defi economy in August alone jumped over 85% reaching close to $8 billion stated on defipulse.com.

Which one is better?

It depends. CeFi platforms work faster, funds are secured and beginner friendly with their easy-to-use interface. The disadvantage of CeFi is that they are more susceptible for hacks, however, DeFi platforms are just as vulnerable for bugs and loss of funds. Moreover, due to the DeFi explosion which overloaded the Ethereum network causing extremely high transaction fees. (Using DeFi you pay transaction fee in Ethereum).

The market is still very unpredictable and highly volatile, however, as the industry evolves and the ecosystem will improve, probably both CeFi and DeFi will have a bright future against traditional banking system.

Question to you: What do you think, who is better and why? Or do you think both needed in the space?