Definition ∞ CEX to DeFi describes the movement of digital assets from Centralized Exchanges to Decentralized Finance protocols. This transfer indicates a shift in user preference or strategy, moving assets from custodial platforms to non-custodial, blockchain-based applications. It often reflects a desire for greater autonomy, yield opportunities, or participation in decentralized governance. This migration impacts liquidity distribution across the broader crypto ecosystem.
Context ∞ The flow of assets from CEX to DeFi is a key indicator of market sentiment towards decentralization and risk appetite. Significant movements can signal shifts in regulatory concerns or perceived security vulnerabilities on centralized platforms. Observing these trends helps analysts gauge the health and growth of the decentralized finance sector.
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