13 DeFi practices for CeFi companies to follow.

This article discusses the strengths of both centralized finance (CeFi) and decentralized finance (DeFi) companies. While CeFi offers perceived security and strength advantages, DeFi offers user empowerment, transparency, and reach. The article suggests that if CeFi companies can’t keep up with the user expectations set by DeFi technologies and protocols, their advantages may become less relevant among younger users and markets. Therefore, DeFi companies should adopt some of the aspects of CeFi that consumers find appealing. The article lists six leading DeFi practices CeFi companies should emulate, such as not playing favorites, opening up access for the underserved, and democratizing financial services. CeFi companies can also benefit from DeFi’s transparency, empowering users, explaining changes, and adopting community-driven decision-making processes.

Embrace interoperability

The power of decentralized finance lies in its ability to work together and combine protocols like “money Legos.” This allows users to create complex strategies. However, centralized finance firms often operate independently, limiting their offerings. By embracing interoperability, centralized finance can integrate services and provide greater value to customers. Integration is crucial for future financial innovation. – Maksym Illiashenko, My NFT Wars: Riftwardens

Establish a more open ecosystem

Centralized finance can promote open innovation and interoperability through decentralized protocols and open-source development. Decentralized finance initiatives are built on transparent, permissionless networks that allow a global community of developers to collaborate, share ideas and improve products and services. This open ecosystem often promotes rapid innovation and the creation of innovative financial solutions. – Theo Sastre-Garau, NFTevening

Seek to compete with the dexterity of DEXs

Traders who prefer decentralized exchanges are typically drawn to the freedom these platforms provide. Centralized exchanges can offer strong protection and peace of mind to their communities, but if they cannot match the efficiency of decentralized exchanges, they risk replicating the limitations of traditional systems. In the long term, centralized exchanges must either respond to the agility of decentralized exchanges or risk becoming the new establishment. – Oleksandr Lutskevych, CEX.IO

Provide real-time data and reports

Transparency is crucial. The efficiency of decentralized finance is demonstrated by its open, auditable blockchains. Centralized finance companies should provide real-time data and financial reports, enable on-chain transactions, integrate wallets and work to enhance the user experience. Expanding services and removing barriers are important steps toward inclusivity. For trust and innovation, centralized finance should learn about openness, user control and inclusivity. – Myrtle Anne Ramos, Block Tides, PlaceWar

Let users verify, not trust

Unlike traditional finance and centralized Web3 exchanges, decentralized finance investors can use blockchain explorers to determine exactly where their assets are at any time. By allowing users to track their funds, companies can mitigate the risk of bank runs that may occur as soon as this trust is called into question. – Wolfgang Rückerl, ENT Technologies AG

This article was published through Cointelegraph Innovation Circle, a vetted organization of senior executives and experts in the blockchain technology industry who are building the future through the power of connections, collaboration and thought leadership. Opinions expressed do not necessarily reflect those of Cointelegraph.

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