The crypto world is all abuzz about its growing concern in the true decentralization of the DeFi apps. And how to bridge the gap between mainstream CeFi platforms and the innovative DeFi space.
LocalTrade, a centralized exchange (CEX) platform, has found a way between these two worlds.
A borrowed approach
LocalTrade adopts a CeFi approach that is based on the concept of a well-developed industry — where the majority of users are familiar with the operation of exchanges or trading platforms.
Instead of putting an end to that path in the top levels of day trading or holding crypto in that exchange, LocalTrade will instead offer products and financial services in the DeFi space. They believe that by improving the user journey, they can become an entry point to DeFi.
Unification efforts
LocalTrade is combining the resources and capabilities of both CeFi and DeFi to drive investments into decentralized finance for the biggest returns.
Using the prevailing CEX capability to make it easier and more secure for users to invest into the DeFi lab products, yield farming protocol, etc – all from within a one-stop shop.
DeFi, on the other hand, prompts users to interact directly with one another — reducing the exchange to some sort of a mediator, a place that hosts users as they conduct peer-to-peer trades.
DeFi is a catch-all term for financial services on public blockchains, specifically Ethereum. Where users can borrow, lend, earn interest, trade assets, buy insurance, trade derivatives, and more. But at a much faster pace and doesn’t impose paperwork or any third party.
DeFi services are typically accessed by users via DEXs (decentralized exchange), which endure low liquidity, slower transaction times, and a less-than-optimal cost-effective trading input and output.
Financial services made easier
Regardless, DeFi isn’t merely DEXs. It overhauls and reinvents the framework of the entire financial system.
Decentralized finance is more than just technological advancement. It provides security, freedom, and transparency that the legacy system can’t.
Users will be able to do things that no one has probably thought possible yet. Such as drawing out a loan without collateral on a weeknight, or trading withholding money in a personal wallet.
Photo: David McBee
