Shuffling The DEX
26 Agosto 2021 - 3:18PM
NEWSBTC
If you walk into a crowded place and shout Binance, there is
probably someone who’s going to open their Binance app to check
what’s going on. Centralized exchanges like Binance, Coinbase, and
HBTC dominate the crypto space. Their reach in the market is an
indication that we are already in the crypto future. Statista
reported earlier in the year that collectively, Binance, HBTC, and
Hydax Exchange process $54 billion worth of transactions every 24
hours, almost a third of the global exchange volume. As crypto
adoption continues to rise, a corresponding surge in the
decentralized Finance (DeFi) sector has driven interests in DEXes
to new heights. But there will always be problems that come with
disruption. In the case of DEXes, the widespread problem has always
been that decentralization comes at the cost of usability. The
Problem With DEXes And The Rise Of Uniswap Decentralized Exchanges
have quickly emerged as solutions to the problems plaguing
centralized exchanges. For example, several centralized exchanges
have been reported to have technical issues when the crypto market
booms. The overreliance on cloud providers like AWS makes it
difficult to prepare for these downtimes. Also, abuse of power is a
regular occurrence. The QuadrigaCX scandal is a good reminder of
this: $190 million in customer cash stored by the Canadian exchange
disappeared with the CEO when he died in 2019, as it was all held
on a single hardware wallet with no one knowing the password but
the deceased. Decentralized cryptocurrency exchanges are designed
to address issues that centralized exchanges have. They are
peer-to-peer (p2p) markets directly built on the blockchain,
allowing traders to keep and manage their funds independently.
Instead of the exchange or any other middleman directing the flow
of money, such as a bank or an internet payment gateway, this
procedure is controlled by a series of smart contracts that keep
track of transactions on the blockchain on which it is built. But
DEXes also pose a series of problems Many exchange operations on
DEXes, such as deposits (also known as locking funds), placing
orders, and finalizing trades, require Ethereum transactions on
DEXes, resulting in an annoying situation where almost every action
you take on a DEX pops up a Metamask window asking for approval,
often also requiring pausing while in-between transactions. In
addition, Liquidity is frequently inadequate due to these
exchanges’ poor user interface. Because order books are thin and
spreads are big, prices are often lower than on a centralized
exchange. Most DEXes today charge a premium for their privacy,
security, and decentralization features. Hence, Uniswap Uniswap,
unlike other DEXes, does not employ order books and instead relies
on an algorithmic pricing method to provide liquidity and minimal
spreads. This price method is operationally simple, making
Uniswap’s smart contract operations very straightforward. This has
the added benefit of increased security, as well as lower gas
costs. Uniswap is an Automated Market Maker (AMM) that establishes
token prices using a simple algorithm: x * y = k. The amount of ETH
in the pool is represented by x, the number of tokens is
represented by y, and k is constant in this equation. When ETH is
used to purchase a token, x increases, y decreases, and the token
price rises. Users do not input a price they want to purchase or
sell at, unlike traditional exchanges. Uniswap works in a similar
way to spot markets, where traders can only buy and sell at the
current price in real-time. Built on the Ethereum blockchain, each
ERC-20 token traded on Uniswap has a pool of Ether and a pool of
the token. The ratio of the size of the ETH pool to the size of the
token pool determines the price of the token at any given time.
However, despite the radical departure from the status quo by
Uniswap, there are other DEXes that offer alternative features that
Uniswap doesn’t offer. Dexes bringing something new to the table.
While Uniswap is popular in the crypto world, there are other DEXes
that serve as viable alternatives or offer entirely different
features. Here are some of them: 1. Balancer: like Uniswap,
Balancer is an AMM that allows users to swap ERC20 tokens. However,
as the name suggests Balancer is a portfolio management tool
balancing assets in a liquidity pool based on a given ratio.
Balancer has been a critical component of a number of highly
successful DeFi initiatives, owing to its dependability, usability,
and adaptability. Uniswap’s liquidity pools are always 50:50,
whereas Balancer lets liquidity suppliers specify any ratio they
choose (such as 98:2). As a result, many liquidity mining sites
choose Balancer over Uniswap since it lowers the danger of
temporary loss. Balancer still maintains one of the greatest trade
volumes of any decentralized exchange, despite its recent decline
in popularity. 2. Solrise: Built on Solana, Solrise is
non-custodial and decentralized fund management and investment
protocol that helps democratize the investment space. On this DEX,
anyone can open a fund or invest. 3. MakiSwap: This DEX runs on the
popular AMM protocol as a yield farming platform built on the Huobi
Eco Chain. It is the first DEX that will offer a variety of trading
experiences including limit orders; charts; analytics; order books,
etc. The DEX is a product of the Unilayer Eco-system which allows
token holders to also reap rewards. 4. Tezos Liquidity Baking: It
is the first protocol layer DEX, giving it an immediate advantage
over application layer DEXs such as Uniswap by allowing rewards to
be distributed in protocol token rather than application token. 5.
Alkemi Network: Unlike the aforementioned, Alkemi Network is a
unique DEX in that it does something no other DEX platform does: it
fuses CeFi institutions with the DeFi space. It Offers
state-of-the-art cryptography and liquidity for financial
institutions and individuals to access DeFibanf earn on their
Ethereum-based digital assets. Alkemi Network: Merging CeFi to DeFi
There seems to be a rift between Centralized Finance and
Decentralized Finance in the crypto space. Thought mostly based on
the features both spaces offers, the dichotomies overlaps. But with
Alkemi Network, the differences are bridged and fused. Alkemi is a
sophisticated liquidity network created with institutional and
retail investors in mind to enable them to access and earn on their
Ethereum-based digital assets. It’s the first liquidity platform to
allow KYC permissioned and permissionless liquidity pools governed
by one network utility token. The network allows participants to
remain complaint by making them undergo KYC verifications before
being allowed to interact within the pool. The major offering of
this DEX is Alkemi Earn, a permission liquidity pool where trusted
counterparties can borrow and lend in wBTC, USDC, DAI, and ETH.
Users can then lend and borrow and are also rewarded through the
liquidity mining program. Why Alkemi Network Is Different? There
are numerous projects in the DeFi space. But what makes Alkemi
stand out is their Alkemi Earn. With earn, users will not only be
able to invest, they will be able to lend and borrow while also
earning rewards through the liquidity mining program. Earn pools
can also be implemented into centralized exchanges to give
consumers who aren’t DeFi power users an embedded experience.
Another thing to consider is that Alkemi Network has an accessible
User interface which makes it more accessible for liquidity mining
programs. The open-access for all kinds of investors makes it a
true DeFi experience. The KYC used by Alkemi is also industry
standard. There’s a rigorous screening of liquidity providers that
helps to fortify the borrowing and lending protocol and code.
Bringing it together As the DeFi space continues to expand, new
projects will keep popping. The institution-grade liquidity network
will help bridge CeFi and DeFi to allow seamless transactions
including borrowing, lending, and investing.
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