Corpus ID: 235435858

CeFi vs. DeFi - Comparing Centralized to Decentralized Finance

  title={CeFi vs. DeFi - Comparing Centralized to Decentralized Finance},
  author={Kaihua Qin and Liying Zhou and Yaroslav Afonin and Ludovico Lazzaretti and Arthur Gervais},
To non-experts, the traditional Centralized Finance (CeFi) ecosystem may seem obscure, because users are typically not aware of the underlying rules or agreements of financial assets and products. Decentralized Finance (DeFi), however, is making its debut as an ecosystem claiming to offer transparency and control, which are partially attributable to the underlying integrity-protected blockchain, as well as currently higher financial asset yields than CeFi. Yet, the boundaries between CeFi and… Expand

Figures and Tables from this paper


Decentralized Finance: On Blockchain- and Smart Contract-based Financial Markets
This paper explores the Decentralized Finance (DeFi) ecosystem. We examine how DeFi is emerging on top of the public Ethereum smart contract platform, compare it to the centralized architecture ofExpand
On the Just-In-Time Discovery of Profit-Generating Transactions in DeFi Protocols
This paper investigates two methods that allow us to automatically create profitable DeFi trades, one well-suited to arbitrage and the other applicable to more complicated settings, and quantifies the value threshold at which a profitable transaction qualifies as Miner Extractable Value (MEV) and would incentivize MEV-aware miners to fork the blockchain. Expand
Insider Trading and Cryptoassets: The Waters Just Got Muddier
  • John P. Anderson
  • 2020
The absence of any clear guidance on when a digital asset is a security is a problem that has ramifications far beyond this article’s limited focus on our insider trading enforcement regime.Expand
Do you Need a Blockchain?
  • K. Wüst, Arthur Gervais
  • Business, Computer Science
  • 2018 Crypto Valley Conference on Blockchain Technology (CVCBT)
  • 2018
This paper critically analyze whether a blockchain is indeed the appropriate technical solution for a particular application scenario, and distinguishes between permissionless and permissioned blockchains and contrast their properties to those of a centrally managed database. Expand
Quantifying Blockchain Extractable Value: How dark is the forest?
It is shown that the largest Ethereum mining pool performs arbitrage and seemingly tries to cloak its private transaction mining activities, providing evidence that miners already extract Miner Extractable Value (MEV), which could destabilize the blockchain consensus security, as related work has shown. Expand
Design Choices for Central Bank Digital Currency: Policy and Technical Considerations
This paper enumerates the fundamental technical design challenges facing CBDC designers, with a particular focus on performance, privacy, and security, and presents a vision of the rich range of functionalities and use cases that a well-designed CBDC platform could ultimately offer users. Expand
High-Frequency Trading on Decentralized On-Chain Exchanges
This work formalizes, analytically exposit and empirically evaluate an augmented variant of front-running: sandwich attacks, which involve front- and back-running victim transactions on a blockchain-based DEX, and quantifies the probability of an adversarial trader being able to undertake the attack, based on the relative positioning of a transaction within a blockchain block. Expand
Ekiden: A Platform for Confidentiality-Preserving, Trustworthy, and Performant Smart Contracts
Ekiden is presented, a system that addresses critical gaps by combining blockchains with Trusted Execution Environments (TEEs), enabling efficient TEE-backed confidentiality-preserving smart-contracts and high scalability. Expand
Is Bitcoin Really Untethered?
This paper investigates whether Tether, a digital currency pegged to the U.S. dollar, influenced Bitcoin and other cryptocurrency prices during the 2017 boom. Using algorithms to analyze blockchainExpand
A2MM: Mitigating Frontrunning, Transaction Reordering and Consensus Instability in Decentralized Exchanges
It is shown that DEX arbitrage and trade routing among similar AMMs can be performed efficiently and atomically onchain within smart contracts, leading to less stale blocks and better blockchain security. Expand