# Rethinking Centralization within DeFi

By [Vickosage](https://paragraph.com/@vickosage) · 2022-11-02

---

Defi and Cefi solutions have seen a meteoric rise since 2020, hitting record-breaking TVLs respectively, with users leveraging the products for their crypto transactions.

However with crypto winter upon us, the flaws of DeFi have come to light with companies like Celsius, BlockFi, and Terra preventing users from withdrawing their money, raising eyebrows in the process

So what needs to change to prevent this from occurring ever again, walk with us

The clear difference between user adoption for CEFi and DeFi solutions is convenience. Companies like Binance, OKEx, and many others offer more convenience for users by offering

*   Cross-chain transactions
    
*   Fiat-to-crypto allowance
    
*   Custody
    
*   Round-the-clock customer support
    
*   Higher yield on digital assets
    

However with these pros come the cons, For instance, while users give their funds because they trust these platforms, the regulation around what happens with users funding is decided by the platforms and not the users.

Speculators propose that for CEFi platforms to offer a higher yield on investments than traditional finance, some high-risk investments must be happening behind the scenes

The bear market is a time to rethink and restructure, and for DEFi to actually live up to the onus of decentralization, a couple of things have to change

1.  Pure DEFi protocols have to optimize for a greater amount of convenience to attract more users
    
2.  A higher amount of due diligence must be done on the users' part. If a CeFi platform offers a higher yield amount that seems too good to be true then it probably is.
    
3.  Platforms have to self-regulate and have restrictions regarding the use of funds by customers
    
4.  Moving forward, users need to push for decentralized autonomy and place their trust in smart contracts that CEFi platforms operate by and not just trust in the institution/platform.
    

Whether these changes will be enacted or not will be determined by a coalition between founders, users, and stakeholders-VCs

---

*Originally published on [Vickosage](https://paragraph.com/@vickosage/rethinking-centralization-within-defi)*