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CeFi, Fintech and DeFi -- Understanding the Benefits, Limitations and Challenges
  • Keshab Nath
Keshab Nath
IIIT Kottayam

Corresponding Author:[email protected]

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The proliferation of novel technologies such as Web3.0, Blockchain, Smart Contracts, and Cryptocurrency has resulted in a burgeoning interest in the concept of Decentralized Finance (DeFi). DeFi represents a transformation in financial instruments that diverges dramatically from traditional financial systems that rely on centralized platforms governed by government entities and various intermediaries. Instead, DeFi is predicated on a protocol that operates on a decentralized infrastructure facilitated by Blockchain, particularly Ethereum. This decentralization permits software developers to create bespoke, high-performance, and secure financial platforms that are universally available to anyone with an internet connection and a computing device. DeFi’s intrinsic value is predicated on its ability to empower millions of individuals worldwide who lack access to conventional financial systems (over 1.7 billion people globally are unbanked for various reasons) to control their finances and engage in transactions with anyone. This decentralized framework ensures equal access and unprecedented economic growth while simultaneously addressing concerns such as centralized control, restricted access, inefficiencies, lack of interoperability, and obscurity.