Should we really already think of an epitaph for CeFi? DeFi should theoretically dig the grave of CeFi to take its place. Ethereum (ETH), in its current version, would not support the full weight of DeFi. We will have to wait for the actual deployment of version 2.0 to be sure that it is able to meet the challenges that lie ahead.
The C will soon be a D
During the Global DeFi and Blockchain Virtual Summit held on December 16, 2020 since Bangkok, the founder of Compound Finance (COMP), Robert leshner, indicated that the integration of DeFi by CeFi was inevitable.
The company’s investment manager SCB 10X, Mukaya Panich, asked Leshner on the possibilities of the adoption of DeFi by CeFi, the advantages of decentralized governance and the limits ofEthereum.
According to Leshner, the boundaries between DeFi and CeFi are increasingly blurred as CeFi systems use DeFi for back-end operations and improving user experience.
Leshner warned that the network Ethereum may no longer be up to par due to its costs and slowness.
For small users who conduct small-value transactions, it would soon be unviable to use Ethereum.
Slow decisions, less rapid evolution: just like Bitcoin
As for decentralized governance, the analyst believes that it has 2 main advantages.
No single entity can destroy the protocol with malicious actions, but anyone can help improve it.
On the other hand, governance decisions are slower with the consequence of slower evolution of the protocol.
Leshner considers that on this point, Compound is similar to Bitcoin (BTC). According to him, the success of Bitcoin relies on the low degree of change in the network and its predictability for its users.
He also revealed that many more tokens will be added to Compound. For this, an asset must be fungible and based on Ethereum, and have a high degree of liquidity.
It will take some time before we can say that CeFi is over! The evolution of DeFi faces technical, but above all legal, obstacles. It slowly nibbles at CeFi, without knowing whether it will be able to completely devour traditional finance. Ethereum could have an upset stomach and regurgitate everything.
Litecoin, welcome in the Silver Age