It has just been announced that Unizen will be working together with Jun Capital in order to form CeDeFi Alliance, a crypto non-profit that will focus on compliance within the centralized decentralized finance (CeDeFi) sector.
What actually is CeDeFi?
CeDeFi is one of this year’s biggest trends in the blockchain industry. It brings the benefits of regulatory safeguards that are found in traditional, centralized finance (CeFi) systems, to the modern, innovative decentralized finance (DeFi) sector.
The key difference between CeFi and DeFi lies in their opposing underlying architectural principles: CeFi requires the trust of an intermediary third-party, while DeFi requires the trust of a blockchain-based protocol.
Unizen’s smart exchange ecosystem, which began development last year, has been attempting to combine the two in order to present users with the best opportunities based on liquidity, network fees, KYC stipulations, and withdrawal fees.
What are the key advantages of CeDeFi?
Given that CeDeFi is still a relatively new term within the crypto industry, many of the advantages are still not fully understood. Ultimately, the purpose of CeDeFi is to combine the best aspects of both centralized and decentralized finance. However, there are some other benefits. Some of the main ones include:
- Lower transaction costs with negligible fees, and faster transaction speeds.
- All products and tokens are audited by the exchange, which reduces the likelihood of fraud.
- It makes it easier for modern products and infrastructure to meet traditional financial regulations that commonly stand in the way, such as Know Your Customer (KYC) and Anti Money Laundering (AML).
- It reduces the obstacles to entry for new users by giving them the opportunity to search for vetted trade opportunities that can be filtered by factors such as fees and KYC, which can help newer, less knowledgeable users to take part by lowering the barrier to entry.
How will CeDeFi Alliance work?
CeDeFi Alliance will aim to unite centralized and decentralized teams in order to encourage decision-makers to discuss proactive cooperation.
The project is being driven by Unizen and Jun Capital – both of which have already established themselves as key drivers of the CeDeFi ecosystem so far. Last year, the organizations joined forces to create ZenX incubator, which was the first CeDeFi incubator for decentralized teams.
The organizations’ new project, CeDeFi Alliance, on the other hand, will be responsible for theoretical frameworks and regulation.
As the CeDeFi sector continues to expand over the coming years, there is little doubt that CeDeFi Alliance will play a key role. Initially, the Alliance will focus primarily on the financial applications of the new centralized decentralized approach. As time progresses, it will move on to explore some of the most innovative use cases across other industries.
If the key centralized and decentralized players in the sector can come together and form enough common ground to create partnerships, there is huge potential for blockchain technology and digital assets to disrupt even more fields in the future.