Comparing DeFi and CeFi Payroll


Payroll is an integral part of any business, and the way it’s managed can have a significant impact on the business’s overall performance. Traditionally payroll is handled in the realm of CeFi, where banks and other centralized authorities control and manage financial transactions. On the other hand, DeFi is a relatively new concept that seeks to replace centralized systems with decentralized ones that are transparent, cost-efficient and secure.

In this write-up we’ll explore the differences between CeFi and DeFi payroll and the benefits and drawbacks of each approach. We will examine the key features of both systems and how they compare in terms of security, transparency, cost, and efficiency.

CeFi Payroll

Payroll is the compensation a business must pay employees for a set period or on a given date. Small businesses may handle their payroll directly by the owner, an accountant, a payroll provider, or an associate using payroll software. 

Most small businesses choose payroll software to process employee payroll for its ease of use and low costs. Through payroll software, employers can track hours worked, spin up tax forms, calculate employees’ pay, and distribute payments via direct deposit (ACH) to employee bank accounts.

With CeFi payroll software, centralized entities like banks and other institutions oversee and facilitate the flow of money. When businesses use direct deposit, their bank must interact with the bank of their employees and perform a series of checks and balances before funds are sent. Though CeFi systems have proven to be relatively reliable, employee payroll setup time and the time it takes to transfer funds suffer becuase of the CeFi systems architecture.

DeFi Payroll

As the world of finance continues to evolve, new technologies and concepts emerge, bringing about a paradigm shift in the way we handle money. One such concept is decentralized finance (DeFi).

DeFi is the blockchain alternative to centralized finance solutions. As such, DeFi has paved the way for innovations such as stablecoins and decentralized apps (dApps) like Streamflow Finance that allow for crypto payroll management via payment streams. 

Streamflow allows businesses to automate payments with stablecoins or other cryptocurrencies. Additionally, employers can automate low-cost real-time payments to compensate employees in more frequent intervals –weekly, daily, or by-the-minute. Teams can rest assured that funds are safe as Streamflow is fully-audited.

CeFi vs DeFi Compared


CeFi payroll software requires employers to pay a monthly base fee ranging from $29-$150. Additionally, businesses must pay a small fee ($2- $8) per employee per payment. For example, if the base fee for the software is $50 and each employee payment is $3. Imagine that you have five employees that you’re paying weekly, then the monthly costs would come to:

  • Base fee: ($50 x 1) = $50 
  • Employee fee: ($3 x 5) 4 = $60

Grand total: $110/ month

The total fee’s can rise depending on the country of the businesses employees and the banks involved.

On the other hand, using Streamflow, businesses will pay a .25% fee for all employee salary for the month. For example, if five employee salaries totaled $31,250 for the month, the business would have to pay $78 in total fee’s! Not to mention, Streamflow allows employers to automate more frequent payments –by the week, the day, the minute– at no additional costs. Additionally, funds are not subject to conversion rates or hidden fees when sending payroll abroad. 

Grand total: $78/ month

Payroll schedules 

Depending on the location and jurisdiction of the business, companies may be subject to paying employees at specific intervals (monthly, bi-weekly). Tighter time intervals present a problem for business owners because the frequency with which they pay employees significantly affects their overhead costs. 

As mentioned, CeFi payroll software charge businesses each time they pay an employee (ex., $2-$8 per payment). If you have over 50 employees and wish to pay them weekly, costs can build up quickly. So businesses pay employees less frequently to keep down monthly expenses.

With Streamflow, businesses can automate the release of payment to employees at any time interval without additional costs. Employees can receive their monthly paychecks weekly or daily equivalent. In addition to payroll, Streamflow is aiming to upend the entire payment model. Employees provide value to their company throughout the work week in real-time but do not receive compensation at the same rate, and Streamflow changes this with the option for real-time recurring payments. 

Setup time 

With CeFi payroll, setup time may take one day to a week onboard an employee with payroll software. During this time, employers must submit ACH terms and conditions forms and collect and submit employee data. This process can lead to new employees receiving their first payment late.    

With Streamflow, all you need is the recipient’s wallet address and email, and you can set up payroll for an entire team in as little as 20 minutes. 


In a traditional or centralized payroll system, individual information is available, like names, addresses, mobile numbers, and in some cases, sensitive information such as background, afflictions, etc. The flow of money is also under the jurisdiction of central banks, which can freeze funds at any time.

In the case of Streamflow, all that is required is a wallet address and, optionally, an email address. Additionally, funds are not under control by a central entity and are not subject to being frozen. Furthermore, the employer is the only person that can cancel payments unless they give that permission to the recipient.

Tax compliance 

CeFi payroll software is tax compliant, allowing employers to remain in good standing with the government and employees to do less work when filing taxes. Payroll software usually has all the necessary forms and tracking tools to file taxes accurately. 

On the other hand, in DeFi, businesses and employees must track the inflows and outflows of assets and submit tax forms to the gov’t as an independent contractor or LLC. However, there are 3rd party services, like Coinledger, and Zenledger, that employers and employees can use to ensure they file crypto taxes correctly. 

Streamflow’s tax compliance suite is currently in development, which will allow users to send payroll and generate tax forms directly from the Streamflow dashboard.


Both CeFi and DeFi payroll have their own unique advantages and disadvantages. CeFi is a well-established system that is widely used and trusted by many businesses. It provides a high level of security and regulatory compliance, but it can also be expensive and less transparent. On the other hand, DeFi offers a more decentralized, transparent, and cost-efficient approach to payroll management. However, it is still a relatively new concept and may not have the same level of regulatory compliance as CeFi. Ultimately, the choice between CeFi and DeFi payroll will depend on a business’s specific needs and priorities.

As the DeFi space continues to mature, Streamflow will continue to innovate token distribution and crypto payroll for businesses looking to streamline their payroll processes.

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