CeFi Bridge

Definition ∞ A CeFi bridge connects centralized finance (CeFi) platforms with decentralized finance (DeFi) ecosystems. This mechanism allows assets to move between traditional financial services and blockchain-based applications. It typically involves wrapping digital assets from one system into a compatible form for use in another. Such bridges facilitate liquidity and accessibility across distinct financial paradigms.
Context ∞ CeFi bridges currently represent a crucial point of interaction for many users entering the DeFi space, but they also introduce centralization risks. Security vulnerabilities and regulatory uncertainties remain key concerns for these intermediary services. The industry is evaluating the long-term viability and necessary security enhancements for CeFi bridges as the demand for seamless asset transfer grows.