Our weekly crypto derivatives analytics report delves into macro events; the current state of crypto and trading signals from spot trading volume; and futures, options and perpetual contracts.

At the start of the week, Bitcoin showed signs of decoupling from US equities. However, US president Trump's positive remarks about the US-China trade war (which had included a 145% tariff on Chinese goods) triggered a relief rally across markets. As a result, BTC has resumed moving up with US equities. 

This rally has led to a rise in short-tenor implied volatility and a recovery in BTC’s put-call skew, indicating that traders are seeking upside exposure.

Please check out the report’s highlights.

Perp open interest rises across the board

Perpetual open interest increased significantly this week across various tokens, especially ETH. Perpetual trading volumes also rose. Notably, Ap 7, 2025 recorded the highest trade volume of the month, following Trump's comment, "Forget markets for a second, we have all the advantages."

BTC option open interest shows a mixed picture; put-call skew in short tenor sends positive signals

President Trump’s recent willingness to negotiate a trade deal with China’s President Xi triggered a relief rally across asset classes, including crypto. Bitcoin had already risen 7% since Apr 21, 2025, prior to Trump's comments. Despite this rally, open interest in puts has outpaced calls, with options volume remaining relatively balanced. 

It's unclear if the demand for puts reflects a hedge against downside risks, or a bet against the upward movement. Meanwhile, perpetual funding rates are providing limited insight into sentiment. However, the recovery of the put-call skew at short tenors indicates that traders are seeking upside exposure to the rally — and are willing to pay for it.

ETH unexpectedly outperforms BTC in this relief rally

ETH's response to the recent crypto market recovery has diverged from previous trends: it outperformed BTC in spot prices, a rarity in past rallies, and open interest in calls exceeds that in puts — opposite to BTC's trend. In addition, ETH call open interest is nearly double that of puts, with calls dominating options volumes. This suggests traders anticipate ETH will reduce its significant underperformance against both BTC and other “ETH killers” like SUI and SOL. Additionally, the spot rally has led to another term structure inversion for ETH.

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Bybit X Block Scholes crypto derivatives analytics report (Apr 24, 2025): Put-call skew recovers at short tenors, showing reviving sentiment

Explore all the hottest Bybit events happening during the week of TOKEN2049 Dubai in this article.

It’s that time of year again — TOKEN2049 Dubai is back, and the city is buzzing with excitement. As one of the most anticipated events on the crypto calendar, it’s not just about the main conference; it’s about everything happening around it, too. From side events and workshops to exclusive mixers and demo days, Bybit is showing up in full force this year. Here's your inside look at what to expect during this action-packed week.

The heart of TOKEN2049 Week, TOKEN2049 Dubai promises two full days of future-facing discussions and innovation in the world of crypto. At the center of it all is Bybit’s immersive booth experience, built on the theme 

. It’s not just a theme — it’s a vibe. Picture claw machines, 

If you’re heading to TOKEN2049 Dubai, be sure to drop by the Bybit booth (located at P33) and chat with our extraordinary Bybit team! And don’t miss your chance to grab a gacha token by scanning our QR code with Bybit Pay. You could walk away with exclusive Bybit merch! 

DMCC x VARA: Crypto regulations and business growth

Policy meets progress at this exclusive evening event co-hosted by DMCC and VARA. This gathering brings together regulators and industry leaders for an open discussion on the future of digital asset compliance and business growth in the region.

You can expect sharp insights, candid perspectives and forward-thinking dialogue about what it really takes to scale a crypto business in a regulated environment. If you care about the future of web3 in the UAE, this is one event to mark on your calendar.

Bybit After Hours: Exclusive Insights & Networking 

 is a private cocktail evening for top-tier traders and long-time supporters of Bybit. This event is equal parts networking, knowledge sharing and celebration.

 to strategic conversations with the Bybit team, this night is tailored to those who trade big and think bigger. With an invite-only guest list, it’s set to be one of the most exclusive experiences of the week.

The Crypto Hub x Bybit Crypto Ark Demo Day

 is all about bringing hands-on energy to the web3 scene. Hosted at the Crypto Ark inside Bybit’s office, this event welcomes founders, devs and crypto creatives for a casual evening of product showcases, idea exchange and light networking.

While Bybit provides the space, the real spotlight is on the community — those shaping the next wave of innovation in web3.

 from across the CIS region are gathering for a deep dive into the tools, tips and strategies that drive growth at Bybit. This meetup goes beyond surface-level sharing — expect actionable workshops covering our Bybit Affiliate program and affiliate best practices.

It’s also a chance to hear directly from Bybit product leads and regional managers, share success stories and walk away with fresh ideas to maximize conversions. 

Wunderbit x Bybit: “Hey, Trading Bot, where is my profit?”

 are here to stay — and this event is going deep into what makes them tick. Co-hosted by Wunderbit and Bybit, the evening workshop blends honest stories from real traders with expert insights on how to avoid common automation pitfalls.

From bot setups that work to the ones that quietly drain your profits, this is your chance to ask the tough questions, hear unfiltered answers — and maybe rethink how you’re running your own bot strategy.

 (RWAs) are taking center stage at the RWA Gulf Summit, a high-powered event co-hosted by Qatar National Bank, Commercial Bank International and DMZ Finance. This summit brings together bank leaders, wealth funds, participants in DIFC, institutional investors and industry pioneers to explore the evolution of tokenized finance in the Middle East and beyond.

Bybit’s Head of Financial Products Jerry Li will take the stage to discuss how 

 (CEXs) can harness RWAs for enhanced yield and 

Dubai's Pinnacle Mixer: Mantle, Mirana, Bybit and Ethena

High above the city, this mixer brings together some of the biggest names in web3 — Mantle, Mirana, Bybit and Ethena. Expect an unforgettable evening of casual chats, cross-chain connections and cocktails with the minds behind some of today’s most innovative projects.

This private event is all about experiencing Bybit Pay in action. See interactive demos, grab a sneak peek at upcoming partnerships and network over bites and drinks. It’s a rare behind-the-scenes look at the way Bybit is shaping the future of crypto payments. 

Wrapping up the week is the Bybit Institutional Symposium — a full-day event dedicated to aligning strategies with institutional clients and forging new collaborations. From macro views to product deep-dives, this conference is built to spark big conversations among serious players.

The day concludes with a gala dinner, a fitting finale to a week in which ideas, connections and innovation have taken center stage.

Intermediate

Bybit Learn Highlights What to Expect at Bybit

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Highlights: What to expect at Bybit (Apr 28–May 2, 2025)

Balance (EPT) is revolutionizing web3 gaming with evolving AI companions, blending blockchain, strategy, and intelligent gameplay in one powerful platform.

Artificial intelligence (AI) agents are a key growth area within the blockchain industry. Projects like Artificial Superintelligence Alliance (FET), 

 (AI16Z) and countless others have been essential components driving the overall crypto market. As of April 2025, the CoinGecko portal lists more than 500 cryptocurrencies within its category of AI Agents. These intelligent assistants are now helping individuals and businesses analyze markets, create textual and visual content, automate work processes and trade profitably.

There's a further area where AI agents on the blockchain are flourishing: the world of 

 gaming. In this sphere, bots and agents based on AI algorithms are helping users develop the best in-game strategies, succeed in the competitive world of play-to-earn (P2E) and overcome key challenges in complex gameplay.

Balance (EPT) is a blockchain gaming project that takes the use of 

 to a completely new level. The creation of the team at the world’s largest social gaming platform, E-Pal, Balance offers players AI agents that can aid them in the in-game environment and serve as their personal companions. Based on a multi-layer architecture, the platform offers some of the most cutting-edge use cases for gaming-oriented AI agents.

 (EPT) is a web3 gaming platform that allows players to easily create, own and use AI companions within the blockchain games it supports.

 Balance supports a variety of first-party (internally developed) and third-party web3 games. You can deploy your AI gaming companions and they’ll act as your assistants, friends or co-players within Balance games.

Using Balance.fun, the platform’s primary web interface, you can create your AI agents and specify various details, such as appearance, personality and functions.

Balance isn’t just another obscure crypto gaming platform. The origins of the project date back to 2020, when the E-Pal social gaming provider was launched by four young California-based technology entrepreneurs — Brian Xiong, Tung Pham, Yuzhe Norris Wang and Yuanzhe Li. E-Pal quickly became a leading force in the newly emerging social gaming field, helping players worldwide find gaming companions. By early 2024, E-Pal had become the world’s largest gaming companion platform, boasting 4.2 million users and 450,000 Epals (gaming companions).

In February 2024, the E-Pal team focused its efforts on 

 and AI technologies, starting the development work on the Balance gaming platform. In September of the same year, Balance went live.

Per the project’s documentation, the platform operates on its own chain, Balance Chain, with 

 (AA) technology used for cross-chain communication. The fungible and 

 (NFTs) held by user accounts are based on the 

A key part of the Balance ecosystem is Key Nodes — purchasable 

 that help with the processing, storage and distribution of data required in the resource-intensive environment of web3 gaming. Some applied instances are the management of real-time leaderboards and the automatic distribution of loot and in-game currency. These nodes can also support the computational requirements of training AI models. As a reward for their work in supporting the platform’s operations, Key Nodes receive a wide range of rewards and benefits, including distributions of EPT tokens, the platform’s native cryptocurrency.

As the ecosystem develops, Key Nodes are envisioned to be involved in governance, 

 launch in September 2024, Balance introduced its Points System, designed to reward early contributors to the platform. During the campaign run in September, users could earn points by completing various specified tasks in various activities, such as joining the project’s social media pages or commenting and reposting.

The 400 users with the best performance in the Points System earned a whitelist spot to receive Pioneer Badge NFTs — distinct tokens that provide owners with early access to games, future campaigns, airdrops and beta testing opportunities. Pioneer Badge NFT holders can also enjoy other benefits, such as premium NFTs and voting rights on the Balance platform.

Balance’s platform provides a set of tools to create and use intelligent companions for Balance-based games. You can design your AI companions by specifying their key traits and behaviors through custom prompts and strategies. The AI agents on Balance can assist you in battles, gaming contests, learning, routine task execution and interactive entertainment.

Balance’s platform is made up of five key layers, each one serving a specific purpose in supporting its user and developer communities. At the top of the architectural stack is the application layer, which acts as the main interface for users to interact with human and AI companions and the wider Balance community.

The application layer also contains the AI Battle Reporting System, which is designed to give users feedback and analysis tools on their performance in the platform’s gaming ecosystem. AI technology is leveraged here to provide personalized analytics and performance improvement recommendations.

A range of NFTs are also part of the layer. These include in-game asset NFTs, as well as 

 (SBTs) that serve as summaries of the holder’s achievements.

The platform layer hosts the various games within the Balance gaming universe. These include both internal games and third-party games that have partnered with Balance. The key concept uniting all of the games is the active integration of AI companions and AI players, making the platform a unique environment in which humans and AI agents play, interact and compete.

The platform layer also features an AI-driven NFT launchpad that offers a rich tool set for creating personalized NFTs for games and applications. These NFTs can be traded on Balance's NFT marketplace, which is also an integral part of the platform layer.

The protocol layer includes a trio of critical protocols — the Fans Protocol, Epal Fan Token (FT) Exchange Protocol and Asset Protocol. The Fans Protocol lets players launch and manage their Fan Tokens, creating opportunities for influencers and community builders to tokenize their efforts and launch high-potential crypto assets. Meanwhile, the Epal FT Exchange Protocol facilitates the management of (and trade in) Fan Tokens.

The third protocol, Asset, is used for the comprehensive management of a wide range of digital assets on Balance, providing easy-to-use tools for asset creation and trading.

The token layer is designed for core operations involving the platform’s native EPT token. This layer supports the use of EPT for in-game purchases, access to services and AI companions, Fan Token minting and trading, in addition to other functionalities.

This is the underlying infrastructural layer that powers the platform’s operational mechanism. It can be described as Balance's operating system, and is made up of several critical components: the node system, the Balance 

, the Balance Chain network and the platform's unique ID system.

The node system provides the computational and storage resources to power games and other functionality on Balance. In addition, the system acts as a key connecting medium between Balance Chain and the AA functionality that lets the platform enjoy cross-chain capabilities.

The Balance stablecoin, also part of the infra layer, is designed to reduce volatility and bring rate stability to the platform's gaming ecosystem. The Balance stablecoin system helps players engage in asset trading without the fear of wild market fluctuations, an important consideration in the 

Designed to support multiple chains, Balance Chain operates based on dynamic protocol adaptation, automatically selecting the optimal blockchain platform according to user preferences and needs. This dynamic adaptability is designed to reduce costs, improve operational speed and enhance overall security for users.

The final major component of the Balance infrastructure layer, the Balance ID system, is a unified and secure user authentication and identity management solution. To be introduced later in 2025, the ID system will let users access all services and games within the Balance ecosystem via a single set of cross-platform decentralized credentials. In addition to human players, also AI companions will have their unique IDs.

EPT is the native cryptocurrency of Balance. Although the platform has been operational since 2024, the EPT token was just launched on Apr 21, 2025, with a total and maximum supply of 10 billion. It was issued on two major blockchains — Ethereum and BNB Chain. EPT has a wide range of functional use cases on the platform, including the following:

The EPT token's supply allocation is per the chart below.

 as a swap pair with USDT, and through the exchange's 

 based on USDT. You can also take advantage of Bybit’s campaign dedicated to the token to grab a share of the 

Under the terms of the event, new users can earn EPT rewards by accumulating a deposit volume of at least 3,000 EPT, or by depositing at least 100 USDT and trading 100 USDT worth of EPT via their first spot trade with Bybit. Meanwhile, existing users can qualify for rewards by trading at least 500 USDT worth of EPT on Spot. The event is valid through May 5, 2025, 9AM UTC.

As of Apr 25, 2025, the EPT token has been on the market for only four days, and is trading at $0.0117, which is 26.4% lower than its ATH of $0.01708 on Apr 21, 2025, and 11.4% higher than its ATL of $0.01129 on Apr 22, 2025.

Long-term price forecasts for EPT are mostly bullish. DigitalCoinPrice 

 of $0.0412 in 2027 and $0.0615 in 2030, whilePricePrediction 

These and other emerging long-term forecasts for the token don't constitute investment advice. Given EPT's extremely short history on the market so far, 

 on the token's future prospects, carefully assess market fluctuations within the crypto gaming niche and consider all other relevant factors before investing in it or any other cryptocurrency.

Capturing emerging market trends and sensing the broader market conditions, the team at E-Pal recognized the tremendous potential of gaming companions back in 2020. Four years later, E-Pal realized that the new market dynamics in gaming called for something even more innovative — the use of AI companions, in addition to fellow humans. The resulting product, the Balance platform, is now racing to stake the claim to the best web3 gaming environment supported by AI agents.

The platform's unique features — cross-chain functionality supported by an AA mechanism, a dynamic exchange system that selects the best network for users' transactions and, most importantly, intelligent AI companions — can certainly help establish Balance as a leader in this niche of web3 gaming.

AI agents are taking the gaming industry by storm, with blockchain technology acting as a powerful enabler of these intelligent friends of ours. The Balance gaming universe — supported by the proven track record of E-Pal — has a great chance of becoming the go-to environment in which to befriend your next artificial gaming partner.

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Balance (EPT): Revolutionizing web3 gaming with evolving AI companions

Mantle has launched the Mantle Index Four (MI4), an institutional-grade fund providing diversified exposure to yield-bearing digital assets. 

The S&P 500 rose 2.03% on strong Alphabet earnings and optimism over a possible Fed rate cut. Gold jumped 1.5% to $3,338 as trade tensions rose and a weaker dollar, along with falling yields, boosted demand. Fed rate cut signals also supported the rally. The Coindesk Indices, which tracks the broader crypto market, rose 0.74%, with Bitcoin up 0.06% and Ether down 1.89%, in the past 24 hours. Trade these markets and more with up to 500x leverage on Bybit MT5 using this 

Today's top performer is INIT, up 15.4%, following the launch of Initia, which aims to revive the appchain concept with an interconnected network and an INIT token airdrop.

Initia (INIT), founded in 2022, is a modular blockchain platform that combines a Layer 1 network with customizable Layer 2 rollups, enabling scalable decentralized app development. It offers flexibility in virtual machines, gas tokens, and transaction systems, while ensuring interoperability and addressing issues like liquidity fragmentation and network congestion. Initia has 

 to revive the appchain concept by offering a network that integrates appchains in a cohesive, interconnected way. The platform emphasizes full-stack control for apps, avoiding fragmentation. Initia is also launching an airdrop with claims available until May 24, 2025. The native token, INIT, has a fixed supply of 1 billion, distributed across eight categories.

Check out the latest prices, charts, and data of 

, an institutional-grade fund providing diversified exposure to yield-bearing digital assets. In partnership with Securitize, which has tokenized over $3B in assets, the fund aims to fill a market gap by offering native yield generation in a traditional fund format. Mantle Treasury has committed up to $400M as the anchor investment. The fund will rebalance quarterly and incorporate DeFi-native staking strategies, such as mETH and bbSOL, while ensuring investor protections. MI4 targets both crypto-native and traditional investors, with Phase 1 rollout scheduled for Q2 2025.

Yesterday, BTC spot ETFs saw a total inflow of $114.7 million, all from non-GBTC funds, while GBTC recorded no flow.

Dolomite, the 10th largest DeFi lending app, is launching a 200M token 

 (20% of total supply) during its TGE on April 24, rewarding users based on platform usage. The DOLO token powers a three-token system alongside oDOLO and veDOLO, enabling incentives, governance, and potential revenue sharing. With over $800M in TVL, Dolomite expands to Berachain, integrating with its Proof of Liquidity system to offer advanced lending features and asset utility.

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Mantle launches MI4 fund for institutional-grade digital asset exposure and yield generation

DeFi

DeFi vs CeFi differs in its applications, security, and its impact on profitability. Discover how DeFi can revolutionize CeFi in the near future.

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Bitcoin prompted the emergence of an entire industry around blockchain technology and digital currencies. Some cryptocurrency market participants argue that decentralized solutions would 

 traditional financial services. While it’s too early to make such claims confidently, we can agree that an exciting competition and interaction between decentralized finance (

) and centralized finance (CeFi) is taking place precisely within the cryptocurrency industry. In the present article, we’ll discuss the main contrasts between the two trends.

The main difference between DeFi and CeFi is that the former involves decentralized infrastructures, where the financial services are governed by communities rather than single entities. In CeFi, all operations are managed by a business or a consortium of companies and organizations. Consequently, the mechanisms differ as well.  

Before understanding the differences between DeFi vs CeFi, we’ll start by defining each approach separately. While CeFi came first to address the Bitcoin adoption, DeFi is the buzzword this year, and we’ll start with it.

 represents a trend or movement that promotes blockchain-powered infrastructures and open-source software to create all kinds of financial services and products, including traditional ones. You can think about services such as lending, trading, issuance of money, payments, insurance, over-the-counter (OTC) trading, 

, financial data, asset management, and more. To visualize it, DeFi is all about transforming traditional banking services to decentralized architectures. So that communities could manage them instead of banks, governments, or regulators.

DeFi is a formidable trend right now, resembling the craze of initial coin offerings (ICOs) from late 2017. The new ecosystem revolves around financial applications developed on blockchain networks. The decentralized applications (dApps) integrate secure permissionless, trustless networks, and eradicate central authority managing the services.

Most DeFi projects currently rely on Ethereum, a public blockchain that offers an open network with intelligent features such as the smart contract. The latter is a critical feature that enables the development of dApps. A smart contract is a blockchain code that can automatically execute and settle whenever predetermined conditions are met. In this way, there is no need for intermediaries like banks and regulators to handle sales, transactions, and other deals involving two or more parties.

As the name suggests, in CeFi, users trust centralized companies and institutions that store their funds to provide various services. Currently, most CeFi solutions are related to cryptocurrency trading, though other applications are also popular.

Most CeFi service providers implement Know Your Customer (KYC) and Anti Money Laundering (AML) practices to abide by their respective jurisdictions’ rules. That means users have to share their personal information and make sure the funds are not coming from criminal activities.

Many CeFi services operate with custodial wallets, which store users’ private keys. Custodians would do everything possible to keep and manage clients’ crypto funds conveniently.

Whenever you trade on popular crypto exchanges like Coinbase, Binance, 

, you deal with a CeFi service. These are platforms run by centralized entities responsible for matching buyers and sellers, offering the required features, and making sure the rules are followed by everyone accordingly. As with any business, the profits from fees are shared among company stakeholders.

Besides trading services, companies fall under the CeFi umbrella that offers borrowing, lending, margin trading, and other financial services.

Some large companies, such as Binance, merge all these crypto services to access them from a single account. Most of the clients agree with sharing their data or storing funds into the custody of these companies providing that they are trustworthy institutions. However, even the most reputable exchanges have 

or thefts that compromised user funds. So this is a risk that CeFi users must know.

Other CeFi crypto firms providing non-trading services are Cred, BitGo, Crypto.com, and Nexo.

DeFi and CeFi share some similarities in the sense that they both involve the same financial services. Sometimes the end-user wouldn’t even notice if a crypto service relies on a DeFi or a CeFi infrastructure. At the moment, both CeFi and DeFi enable the same group of financial services, including spot trading, derivatives trading, margin trading, borrowing and lending, payments, and the creation of stablecoins.

Speaking about trading, both CeFi and DeFi platforms can create intuitive interfaces so that newbies could be onboarded effortlessly.

Often, the same people and organizations are involved in the development of both CeFi and DeFi projects. After all, both trends are advocating the use of blockchain and digital currencies.

Even though both trends’ fundamental goals are the same – to promote the adoption of decentralized ledger technologies (DLTs) – several significant differences split DeFi and CeFi into two different worlds. Here are the main aspects that differ:

As mentioned, CeFi projects are controlled by a single entity or group of entities that run every business aspect. Elsewhere, even though distinct groups of people and organizations develop most DeFi projects, the resulting platforms are governed by communities via different mechanisms. Any DeFi project would try to mimic Bitcoin or any other public blockchain in decentralization, though the consensus algorithms differ from case to case.

Some DeFi projects offer governance tokens that enable holders to take part in decision-making processes. An example of a governance token that exploded in the summer of 2020 is Compound (COMP).

CeFi and DeFi services provide various features that are unique for each group. For example, most CeFi projects offer custody solutions and have dedicated customer service teams, generally not available in DeFi.

On the other side, trading on DeFi platforms happens on blockchain as there is no single authority involved. This achievement is possible thanks to several key features, including automated market-making (AMM), liquidity pools and 

, and non-custodial swaps. Usually, there are no KYC requirements in DeFi, while the funds are stored in personal wallets until the transaction’s execution. The crypto exchanges built on blockchain infrastructures are called decentralized exchanges (

While some companies provide both centralized and decentralized exchanges, Binance is one such example. Its DEX platform doesn’t require registration or KYC verification.

Another great feature of DeFi is the tokenization of traditional assets. Thus, blockchain can be used to create digital units of any asset or investment, including commodities, company shares, forex pairs, and stock indexes, among others.

Initially, when the first crypto exchanges facilitated fiat conversions, there was no regulation whatsoever, as governments didn’t fully understand Bitcoin and blockchain. Nevertheless, today most jurisdictions try to regulate crypto operations directly or indirectly. So, this is one of the reasons why most CeFi platforms require KYC verification. In the US, Coinbase is registered with the Securities and Exchange Commission (SEC), while other global platforms moved their headquarters to crypto-friendly jurisdictions like Malta or Estonia. Meanwhile, the European Commission is about to create 

 aimed at cryptocurrencies. All in all, there are more jurisdictions in correlation to CeFi services.

As for DeFi, this is a new trend, and it is not regulated anywhere given the nature of decentralized networks. However, even if it’s more difficult to impose regulation on DeFi markets, a research paper by BCG Platinion and Crypto.com

 that the rapid boom in DeFi created conditions for money laundering will attract regulators sooner than later.

Usually, centralized exchanges charge higher fees to maintain the platform, pay salaries to the staff, improve their products, and more. Elsewhere, DEX platforms are more affordable to trade on, as they don’t provide custody services and don’t have any team involved in the governance process.

Generally, the fee revenue is shared among liquidity providers and token holders that choose to stake their tokens. An example is Uniswap, a crypto swap platform that distributes the funds from fees among liquidity providers.

The way liquidity is achieved in DeFi is very different. In CeFi projects, the platforms match buyers’ and sellers’ orders similarly to forex or stockbrokers. In DeFi, all trading is not carried out automatically on blockchain. Instead, DEX platforms rely on AMMs, an innovative concept in which both sides of a trade are pre-funded by liquidity providers incentivized to locate their funds.

Eventually, the trading fees are shared between liquidity providers, as mentioned in the previous paragraph. Usually, liquidity pools comprise two constituents representing a trading pair, e.g., BTC/ETH. Liquidity providers have to contribute equal values by locking both BTC and ETH based on the current rate.

Even though CeFi platforms do their best to maintain a high degree of security, you can regularly find out about some significant exchange being hacked. At the beginning of the year, Chainalysis said that 2019 saw the most hacking attacks ever, though the number of stolen funds had declined drastically compared to 2018.

There is no such risk for decentralized exchanges, as the platform doesn’t store user funds. The only thing users should pay attention to is the code and the consensus algorithm used by the DeFi project. Sometimes the underlying technology may come with bugs and other issues.

The execution speed is relatively high in both CeFi and DeFi, though it depends on each platform individually. Most exchanges can provide almost instant performance for market orders.

CeFi platforms are the simulations of traditional banks, and they have already demonstrated their potential and still do. On the other hand, DeFi is only at its nascent stage. Many industry onlookers predict a vast revolution in which DeFi services would gradually replace traditional ones and threaten the banking system.

Still, as of today, both DeFi and CeFi have their places in the crypto industry. They provide faster transactions, attractive yields, and excellent infrastructure aimed at communities.

Both DeFi and CeFi can be applied to all kinds of traditional and crypto-related financial services, such as spot trading, derivatives trading, lending and borrowing, and more. Fiat to crypto conversions and vice versa is also available in both ecosystems. Also, both DeFi and CeFi platforms may provide cross-chain services, though the mechanisms differ.

In general, the two trends have similar applications, but the approach is very different. One thing specific for DeFi alone is the tokenization of assets. For example, Synthetix hosts a DeFi ecosystem where users can create so-called synthetic assets (synths), which are ERC20 tokens representing real-world assets. Users can eventually provide liquidity to those synths and trade them on a dedicated exchange. Synthetic assets have great potential, capable of making derivatives trading more flexible, accessible, and transparent.

There are good projects in both sectors, but DeFi runs the show these days, at least from an investor’s perspective. You can get direct exposure to CeFi projects by investing in the native tokens of cryptocurrency exchanges. At the moment, Binance Token (BNB), Crypto.com Coin (CRO), and Huobi Token (HT) are the most popular CeFi tokens. Arguably, 

 is a CeFi constituent, given that Ripple is a centralized company.

That said, there are way more DeFi options to choose from now. That’s especially when this sector is still at its infant stage.

DeFi tokens are way more volatile than the rest of cryptocurrencies, which is very telling of the risks. It would be best if you stuck to proper risk management techniques when investing and never deposit more than you’re ready to lose.

Another problem with DeFi is that it hosts an increased number of

, the same as the ICO space did a few years ago. That’s why you should better invest in well-established DeFi projects.

DeFi tokens can boost your profitability, especially if you managed to catch the trend right after Bitcoin’s nosedive back in March 2020. Tokens like UNI, COMP, Maker, SNX, and KNC have demonstrated impressive returns this year. The same is right about projects that benefit from the DeFi boom, such as Chainlink and Polkadot. Here is how the most popular DeFi tokens performed so far this year:

Bitcoin (blue line) has performed better than most DeFi tokens year-to-date as it hit the highest level in almost three years as of November 2020. Still, LINK and KNC have provided impressive yields. Despite Bitcoin domination, DeFi tokens have much room to grow.

What To Expect From DeFi and CeFi in the Future?

The medium-term future is bright for both DeFi and CeFi, as the financial crisis will highlight the importance of refuge assets with low correlation to traditional markets. It will also stress the importance of blockchain solutions for all kinds of financial services that governments should not manipulate.

In the long-term future, DeFi will thrive as it has the potential of making financial services accessible to everyone. Investors should keep an eye on Ethereum’s transition to Proof of Stake and the regulatory changes related to DeFi, which will impact the emerging sector. 

DeFi vs CeFi Cryptocurrency: What Are The Differences?

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