CeFi stands for Centralized Finance, which refers to financial services and platforms that are centralized and operated by a central authority or institution. In the context of digital assets and blockchain, CeFi typically includes centralized exchanges, lending platforms, and other financial service providers that require users to trust and rely on a central entity to facilitate transactions and manage their assets.

CeFi platforms are similar to traditional financial institutions, where users deposit their funds (digital assets) into centralized wallets or accounts, and the platform controls the custody and management of these assets. CeFi platforms often provide a range of services such as trading, lending, borrowing, and earning interest on deposited assets.

While CeFi platforms offer convenience, liquidity, and familiar user interfaces, they also come with certain drawbacks. Users may have to go through KYC (Know Your Customer) processes, relinquish control of their private keys, and trust the central authority to safeguard their funds. Additionally, CeFi platforms are susceptible to hacking and regulatory risks.