This Is How LocalTrade Is Bridging the Gap Between CeFi And DeFi

When Coinbase went public on April 14 this year, the blockchain and crypto community received it with mixed reviews. Some believed it was a milestone towards making crypto mainstream, as it passed all regulatory requirements and made it to the front pages of all media outlets. Others weren’t so happy. Going public meant the exchange lost sight of the true Bitcoin spirit and somehow betrayed its foundational pillars of decentralization, democratization and fairness.

a milestone towards making crypto mainstream, Shakil Muhammad


Decentralization is not only a word: it’s the whole idea behind the DeFi, crypto and the blockchain movement, since Bitcoin was founded in 2008. DeFi, short for Decentralized Finance, is all about “reconstructing the banking system for the whole world in this open, permissionless way,” says Alex Pack, managing partner at Dragonfly Capital, a $100 million crypto fund.

One of the trends of crypto in 2021 is actually going back to that principle of true decentralization. However, from an operational standpoint, we are still in the early phases of DeFi development, and creating a decentralized finance ecosystem is a laborious and complex effort, and one the public is not quite ready for. Until now.

Crypto exchange LocalTrade has come up with an innovative solution. Using a soft approach and focusing on creating a seamless experience for users, they are successfully merging CeFi and DeFi.

To help bridge those two not-so-distant worlds, the LocalTrade ecosystem consists of a full-fledged CEX trading platform and DeFi investment platform — the DeFi Lab, which is a further development of LocalTrade CEX.

The User Journey: From CeFi To DeFi

Most exchanges nowadays are CEXs. These are convenient venues for day traders and crypto investors to purchase and sell crypto as the speed and cost-efficiency of processing transactions is done by a single point of authority.

However, according to CoinMarketCap, “The reliance of CEXs on a central entity does lead to some disadvantages, however. Centralized exchanges do not reveal their internal operations to the users, leading to a lack of transparency that enables malicious practices such as wash trading and price manipulation.”

LocalTrade’s solution is based on a CeFi approach that builds on the idea of a well-developed industry. Most users are familiar with how exchanges or trading platforms work. But instead of just ending that journey in the top levels of day trading or holding crypto in that exchange, LocalTrade aims to offer products and financial services that are within the DeFi space. By improving that user journey, they believe they can become an entry point to DeFi.

“By combining CeFi expertise and tech infrastructure with DeFi opportunities, we drive investments into decentralized finances with the best returns. We utilize the current CEX capacity to make it easy and secure to invest in the DeFi Lab products, Launchpad and tokensales, tokenized securities smart-funds, and yield farming protocol, all from within one payment gateway,” mentioned the company in a white paper.

Solving the DeFi Challenge

On the other hand, DeFi promotes users to interact directly with other users, making the exchange a mere enabler, a plaza that hosts both users as they perform a P2P transaction. In fact, DeFi is an umbrella term for financial services on public blockchains, primarily Ethereum. With DeFi, users can do most of the things that banks support — earn interest, borrow, lend, buy insurance, trade derivatives, trade assets, and more — but it’s faster and doesn’t require paperwork or a third party.

DeFi apps have some bigger challenges as of today:

  1. To ensure true decentralization, other users need to be connected to the app continuously, making it slower than CeFi-based platforms.
  2. Most DeFis create on-chain order books with tons of data of transactions, which depletes all the network resources and affects throughput significantly.
  3. On-chain trading is not real-time as all transactions have to be processed by miners.
  4. Likewise, due to a lower influx of users, most DeFi apps suffer from low liquidity problems.

Users normally access DeFi services through DEXs, short for Decentralized Exchanges, which in turn suffer from slower transaction times, low liquidity and a not so favorable cost-efficiency trading input / output.

“While decentralized exchanges (DEXs) seem to solve the most commonly faced problems in centralized exchanges, they have their own loopholes. Present DEXs still have no way to stabilize prices which means they may charge users more than the real price of a coin. Ethereum is the most commonly used platform for DEXs and these DEXs have failed due to the architectural issues. Decentralized exchanges does not have advanced trading functionalities such as margin trading and different order types (stop losses or limit orders),” said PhD and blockchain researcher Shakil Muhammad.

A New Financial Future

However, DeFi is not only DEXs, but a whole new paradigm shift in the financial system. Decentralized finance is not just technological innovation; it provides freedom, security, transparency that the legacy system simply can’t. Users can do things that are unthinkable in real life – such as take out a loan on a Saturday night without collateral or trade withholding money in a personal wallet.

“We are sure that DeFi’s ecosystem would benefit from increased liquidity and better rates due to institutional money flowing into it. Being so attractive, we look forward to DeFi helping fintech become a driving force for global economic innovation,” mentioned LocalTrade.

Almost all institutional players have begun experimenting with DeFi. The research from Fidelity Digital Assets SM’s 2021 shows that nearly 70 per cent of institutional investors find crypto attractive.

There are three almost equally positive characteristics across Asian and European market investors talk about: uncorrelated to other asset classes (36 per cent); an innovative technology play (34 per cent); high potential upside (33 per cent). European investors are even more optimistic about digital assets, with 82 per cent finding something appealing. Around 7 of 10 institutional investors wish to buy or invest in digital assets in the future, and more than 80 per cent of those interested consider having an allocation in their institution’s or clients’ portfolios within the next five years.

And DeFi’s interest is only rising. DeFi provides financial products available to everyone because they’re doing it fast and low-cost. Without the need for intermediaries, geographical boundaries, or jurisdictional boundaries. DEXs, peer-to-peer lending, stablecoins, prediction markets, and yield farming initiatives are the most popular DeFi products since they not only remove middle-man issues but also increase flexibility and bring breakthrough returns on investment.

Almost $20.5 billion was invested in DeFi as of 2021, and that number is only growing. Investors trust its potential. It’s now the turn of apps like LocalTrade to make sure the public trusts DeFi too.

Note: Investment in cryptocurrency is subject to risk and readers should do their own due diligence. Entrepreneur Media does not endorse any such investment.

Internet Explorer Channel Network
News Related


France successfully launches cutting-edge military communications satellite

France has successfully launched a state-of-the-art satellite into orbit, designed to allow all of France's armed forces across the globe to communicate swiftly and securely. Paris created a space force ... Read more »

Nigella Lawson lasted just two weeks on vegan diet and confesses she doesn't 'see the point'

Nigella Lawson says she tried a vegan diet, but couldn’t stick to it. (David M. Benett/Getty Images) Nigella Lawson only managed two weeks of a vegan diet and says she ... Read more »

Strictly Come Dancing Fans Are All Saying The Same Thing About AJ Odudu And Kai Widdrington's 'Phenomenal' Argentine Tango

Whilst it is undoubtedly a fan favourite, the Argentine Tango can be a notoriously difficult dance for the Strictly Come Dancing celebrities to get right. Not only to they have ... Read more »

Black Friday Garmin deals 2021: early sales and what to expect

The best Garmin deals of the year are likely just around the corner, as Black Friday is on November 26, and it’s followed by Cyber Monday on November 29. These ... Read more »

Elon Musk's Starlink in talks with Vodafone for UK expansion

Elon Musk’s Starlink is eyeing a tie-up with Vodafone to expand its satellite broadband service in the UK. © BRENDAN SMIALOWSKI/AFP Elon Musk – BRENDAN SMIALOWSKI/AFP The US satellite company, ... Read more »

MotoGP Italy live stream 2021: how to watch Emilia-Romagna Grand Prix online from anywhere

We saw a glimpse of the old Marc Marquez a few weeks back in the US, but even at his talisman circuit the Spaniard could only put four seconds between ... Read more »

Raab's negligence over Kabul is now clear. If he had any honour, he'd quit

Dominic Raab is a clever man, but not perhaps a wise or especially honourable one. Chronic misjudgments over Britain’s withdrawal from Afghanistan necessitated his sacking as foreign secretary. Yet Boris ... Read more »

Google Pixel 6's in-app translation may be the travel dream you've been waiting for

The Google Pixel 6 has plenty of promising features, but one stuck with me more than others – mostly because it would have come in clutch when a massive thunderstorm ... Read more »

The small but effective plug heater to snap up for winter

Looking for a small at-home heater? We may have just found the solution. (Russell Hobbs) Yahoo Lifestyle is committed to finding you the best products at the best prices. We ... Read more »

Why Are There Christian Crosses in Jewish Graves From Ancient Rome?

Realy Easy Star /Toni Spagone/Alamy The most pervasive and well-known symbol for Christianity is, of course, the cross. If you walk into a place of worship and there’s a cross ... Read more »

Giant owl not seen for 150 years pictured in wild for first time

A giant owl that has gone almost unseen in African rainforests for 150 years has been photographed in the wild for the first time by British scientists working in Ghana. ... Read more »

SoftBank Ventures Asia signals greater focus on Chinese tech start-ups with new Beijing unit

SoftBank Ventures Asia has formed a new subsidiary in China this month, signalling a bigger commitment towards its early-stage venture investing in the country since launching a dedicated US$285 million ... Read more »

[News Focus] Samsung still lost a year after Lee Kun-hee's death

Lee Jae-yong, vice chairman of Samsung ElectronicsMonday marks the first anniversary of the death of Lee Kun-hee, the chief of South Korea’s largest conglomerate Samsung and its flagship unit Samsung ... Read more »

Why Galaxy Bespoke should have you excited for the Samsung Galaxy S22

At some point in the next few months Samsung is expected to unveil the Galaxy S22, its new series of flagship smartphones, but if the jump from the Galaxy S10 ... Read more »

Compact SUVs gaining ground in Korea

Kia’s Sportage SUV / Courtesy of Hyundai Motor Group By Baek Byung-yeul C-segment or compact sport utility vehicles are gaining ground in Korea’s automobile market as their dimensions have grown ... Read more »

[INTERVIEW] Snapchat aims to improve its presence in Korea

A Google Pixel 6 phone user uses Snap’s photo messaging app, Snapchat. Courtesy of Snap By Baek Byung-yeul Nana Murugesan, managing director of international markets at Snap / Courtesy of ... Read more »

[Newsmaker] Authorities to begin looking into data to explain why Nuri launch failed

(Yonhap)South Korea’s Science Ministry said Sunday that researchers will begin looking into why the country’s first domestically-built rocket Nuri, or Korean Satellite Launch Vehicle II, failed to put a dummy ... Read more »

All eyes on Samsung heir's next move on late chairman's death anniv.

Samsung Vice Chairman Lee Jae-yong enters the Seoul Central District Court for a hearing on illegal use of surgical anesthetic propofol on Oct. 12. Korea Times photo by Ko Young-kwon ... Read more »

[Battery+] Tesla's battery shift highlights K-battery's uncertain future

LG Energy Solution’s cylindrical lithium-ion batteries. (LG Energy Solution) To take initiative in the premium electric vehicle market, where longer driving ranges serve as the barometer of competitiveness, the South ... Read more »

Facebook Portal Go vs Facebook Portal: which smart display should you buy this Black Friday?

Facebook has been in the video calling game for a few years now, but its Portal displays have struggled to gain the traction that other brands have found during the ... Read more »

Judi Love pulls out of Strictly Come Dancing for health-related reasons

Photo credit: Eamonn McCormack – Getty Images Comedian and panelist, Judi Love, has had to pull out of Strictly Come Dancing this week after testing positive for COVID-19. Her partner, ... Read more »

Jamie Laing explains why he is one of Spencer Matthews' only friends

Jamie Laing and Spencer Matthews attend the “Once Upon a Time… in Hollywood” UK Premiere at in 2019. (Photo by Dave J Hogan/Getty Images) Yahoo Entertainment's editors are committed to ... Read more »

S. Korean defense firms clinch deals worth US$128 mln at ADEX: organizers

SEOUL, Oct. 24 (Yonhap) — South Korean defense companies have signed business contracts worth US$128 million in total during a biennial arms exhibition held south of Seoul last week, its ... Read more »

Melbourne ends one of the world's longest lockdowns


India's Salman Khan, Amitabh Bachchan, other stars eye NFTs amid global craze

Indian celebrities from the world of Bollywood and cricket are increasingly launching digital memorabilia through non-fungible tokens (NFT), hoping to rake in thousands of dollars by cashing in on growing ... Read more »

Oil refiners fear losing W800 trillion amid carbon neutral transition

Korea Enterprises Federation (KEF) Executive Vice Chairman Lee Dong-geun speaks during a discussion hosted by the KEF on the government’s carbon neutrality goal at the Press Center in central Seoul, ... Read more »

Mummy's older than we thought: new find rewrites the history books

The ancient Egyptians were carrying out sophisticated mummifications of their dead 1,000 years earlier than previously thought, according to new evidence which could lead to a rewriting of the history ... Read more »

Microsoft is ‘sorry' for angering developers by removing a key feature

Microsoft apologised to the open source community after facing a severe backlash against removing an important feature in the upcoming .NET 6 release. The .NET open source community was angered ... Read more »

Drone Footage Captures Four Active Vents at La Palma Volcano

Four active vents on the Cumbre Vieja volcano were visible on October 22, spewing lava and other volcanic material over La Palma, in the Spanish Canary Islands. The following morning, ... Read more »

Marvin Vettori overcomes a 'massive' Paulo Costa, who blamed an injury for weight issue

LAS VEGAS — Paulo Costa entered the Octagon at Apex on Saturday, his grudge match with Marvin Vettori only moments away. In 90 seconds, maybe two minutes, he’d be able ... Read more »

When Elon Musk ‘trolled' Apple CEO Tim Cook over a piece of cloth

NEW DELHI: Tesla CEO Elon Musk is known for his witty, weird and all kinds of tweets. Musk, in a tweet, has now made fun of Apple. Apple CEO Tim ... Read more »

Tackling Business Strategy: 6 Tenets of Building a Scalable Brand

Scalability refers to the ability of a business to increase revenue without much increase in costs. For example, suppose you own Emma’s Pet Treats. Maybe you bake dog biscuits for ... Read more »

S. Korea's seaport cargo up 8.1 pct in Q3 amid global rebound

SEOUL, Oct. 24 (Yonhap) — Cargo processed at South Korean seaports advanced 8.1 percent in the third quarter of this year as trade gained traction amid the global economic recovery ... Read more »

The Stories We Tell Ourselves Are the Most Important—What Do Yours Say?

Last summer we rented a pontoon boat. We were visiting my home state and decided that spending the day on one of the 10,000 lakes, taking in the fresh air ... Read more »

Launching a Business Against All Odds: 3 Tips for Startup Success

Launching a business is somewhat formulaic. You need four things at a minimum to be successful: a great product, a solid team, proper marketing and paying customers. But even with ... Read more »

Beats Fit Pro release date, news, and rumors

It seems like the AirPods 3 aren’t the only pair of wireless earbuds Apple is set to launch this year, as the rumored Beats Fit Pro wireless earbuds may not ... Read more »

I tested The Rock's exercise headphones to see if I could go ‘Beast mode'

Dwayne ‘The Rock’ Johnson and I probably don’t have much in common. He’s a muscled ex-wrestler, while I’m an average-bodied writer. He’s a charismatic and energetic celebrity, while I’ve never ... Read more »

Here are the top Christmas Lego sets we hope are in the Black Friday sales

It’s a little ominous to think about, but we’re only two months out from Christmas, and once Black Friday 2021 it’s the next big thing in most people’s calendars. But ... Read more »
On you will find lots of free English exam practice materials to help you improve your English skills: grammar, listening, reading, writing, ielts, toeic