# CeFi vs. DeFi -- Comparing Centralized to Decentralized Finance

arXiv: https://arxiv.org/abs/2106.08157 · HTML: https://mlsanity.com/paper/2106.08157/

## Key facts

- Cited by 4 papers in the map (data through 14 Oct 2026).
- First posted on arXiv 15 Jun 2021.

## Built on by (most cited first, 4 of 4)

- [A Survey of Blockchain, Artificial Intelligence, and Edge Computing for Web 3.0](https://mlsanity.com/paper/2311.13731/) (2023)
- [Benchmarking Temporal Web3 Intelligence: Lessons from the FinSurvival 2025 Challenge](https://mlsanity.com/paper/2602.23159/) (2026)
- [From Risk to Rescue: An Agentic Survival Analysis Framework for Liquidation Prevention](https://mlsanity.com/paper/2604.14583/) (2026)
- [DeFiFusion: Combining Transaction Events with Smart Contracts to Detect Price Manipulation Attacks](https://mlsanity.com/paper/2609.11008/) (2026)

## Abstract (arXiv)

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.