  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 DeFi may not be always so clear cut.
  In this work, we systematically analyze the differences between CeFi and
DeFi, covering legal, economic, security, privacy and market manipulation. We
provide a structured methodology to differentiate between a CeFi and a DeFi
service. Our findings show that certain DeFi assets (such as USDC or USDT
stablecoins) do not necessarily classify as DeFi assets, and may endanger the
economic security of intertwined DeFi protocols. We conclude this work with the
exploration of possible synergies between CeFi and DeFi.
