Crypto financial services operated by centralized companies that custody user funds, as opposed to decentralized protocols.
Crypto financial services operated by centralized companies that custody user funds, as opposed to decentralized protocols. Lygos was specifically designed to solve CeFi's fundamental flaw: counterparty risk. While CeFi lenders custody your Bitcoin (and may rehypothecate it), Lygos's DLC architecture ensures your collateral never enters Lygos's custody. You get the professional lending experience of CeFi with the trustlessness of a Bitcoin-native protocol.
Centralized Finance (CeFi) refers to crypto companies that offer financial services (lending, borrowing, trading, yield) through centralized platforms where the company custodies user assets. CeFi platforms include exchanges (Coinbase, Binance), lenders (Celsius, BlockFi, Nexo, Ledn), and brokerages. CeFi offers familiar user experiences and customer support, but introduces counterparty risk: if the company mismanages funds, becomes insolvent, or faces regulatory action, user assets may be at risk. The 2022 CeFi crisis (Celsius, FTX, BlockFi, Voyager all collapsed) demonstrated this risk catastrophically, with billions in customer assets frozen or lost.
Lygos was specifically designed to solve CeFi's fundamental flaw: counterparty risk. While CeFi lenders custody your Bitcoin (and may rehypothecate it), Lygos's DLC architecture ensures your collateral never enters Lygos's custody. You get the professional lending experience of CeFi with the trustlessness of a Bitcoin-native protocol.
| Lygos | Ledn | Nexo | Unchained | |
|---|---|---|---|---|
| Custody | Non-custodial (DLC) | Custodial | Custodial | Collaborative multisig |
| Rehypothecation | 0% (impossible by design) | 100%. Your BTC may be lent out | Yes, platform re-lends assets | No |
| APR | 10% | 9.99–11.49% | 2.9%+ (loyalty tier dependent) | 14.18% |
| Technology | Discreet Log Contracts (Bitcoin-native) | Centralized custody | Centralized custody | 2-of-3 multisig (manual) |
Understanding CeFi (Centralized Finance) provides context for how Bitcoin lending fits into the broader financial ecosystem. DeFi concepts are reshaping how people think about borrowing and lending.
Starting at 10% APR, $0 origination fees, and DLC-secured collateral on the Bitcoin blockchain.