CeFi vs DeFi 2025 – Which Is Better for Passive Income?
CeFi offers simplicity and fiat ramps; DeFi offers transparency and higher yields. Here’s how they compare in 2025.
Quick Comparison Table
| Aspect | CeFi | DeFi |
|---|---|---|
| Custody | Exchange holds funds | You hold private keys |
| Risks | Custodial, insolvency | Smart contracts, hacks |
| Yields | Stable, capped | Higher, variable |
| UX | Easy, beginner-friendly | Advanced, wallet setup |
| Transparency | Low (black box) | High (on-chain) |
When to Choose CeFi
Best if you want fiat on/off ramps, centralized support, and simple staking products.
When to Choose DeFi
Best if you prefer self-custody, higher yields, transparency, and direct access to protocols.
Balanced Strategy
Many investors split between CeFi and DeFi to balance ease of use and yield opportunities.
Conclusion
CeFi and DeFi complement each other. CeFi gives convenience; DeFi gives control and transparency. Use both to maximize opportunities in 2025.