- By Pierre-Alexandre
March 27th, 2019
Decentralization is the backbone of cryptocurrencies. Bitcoin and other cryptocurrencies were developed to operate without any central control. With the slow rises of decentralized exchanges (DEX), decentralization would soon be present in every aspect of the crypto space.
What is a decentralized exchange?
Decentralized exchanges are crypto exchanges that are designed to be independent of third-party services. Third-party services providers are not needed to hold the funds of clients, and trades are carried out directly between the users via automated processes.
The decentralized exchange system is different from the centralized method of trading where users deposit funds and the platforms allow them to trade freely using the deposited funds.
DEX offers numerous benefits to the crypto space, with the primary one being their trustless nature of operation. Users do not have to leave their funds with exchanges or with any other third-party service provider. The funds will be available in your wallet until you are ready to carry out transactions.
They also have other benefits including a high level of privacy, the absence of server downtime, and a few others.
The decentralized exchange aspect of the XRP Ledger was the feature I liked the most as well. It’s why I tackled offer autobridging: to make the DEX aspect even better.https://t.co/UmKU8vR6qe https://t.co/maF5Zk730o— Nik Bougalis (@nbougalis) February 21, 2019
Binance and OKEx working on decentralized exchanges
Some prominent cryptocurrency exchanges including OKEx are currently developing their decentralized exchanges. Binance DEX has already been launched, with the development team releasing a summary of their progress so far and what to expect.
Binance carried out a simulated trading competition on their DEX platform a week after it was launched and the contest lasted between March 7th to 21st. The team gave some updates regarding the competition, revealing that 320 tokens were issued during the two weeks period. In addition to that, over 5,000 accounts were registered as participants, and they created 258 trading pairs. In total, the transaction volume reached the $500 million mark, a milestone that was achieved in 7.3 million transactions carried out by 666,000 activated addresses.
Binance launched testnet of its decentralized exchange today— Joseph Young (@iamjosephyoung) February 20, 2019
Many DEX projects struggled. I think Binance has the best chance of operating first widely used DEX
1. Prioritization of user experience
2. Loyal user base
3. Speed@cz_binance @ForbesCryptohttps://t.co/DtzHWXDcme
The team believes that the platform has the capacity to handle even larger transactions, adding that the participants tested some new features including multi-send, airdrops, and others. However, despite the positives, the team revealed that it encountered some challenges due to bugs that affected the performances of some features. Those features have been taken care of, and Binance DEX is working excellently.
In the same breath, Malta-based crypto exchange, OKEx announced last week that its operations team is currently developing a decentralized exchange called OKChain. The DEX is in its final stage of development, and a testnet is expected to be launched in June.
OKEx announced that its OKB would be the native coin of the decentralized exchange and it can be used to pay for dApps and settle transaction fees.
I will be creating my own decentralized exchange called Palley's Decentralized Exchange so please send me all of your private keys and because I called it decentralized I am not liable for nuffin' so don't even try.— Palley (@stephendpalley) February 20, 2019
Also, this isn't a fiduciary tweet either.
DEX could save investors from losing funds
While most decentralized exchanges are still under development, they could protect investors from losing funds. The recent failure of Canadian crypto exchange, QuadrigaCX is one of the reasons why DEX are considered to be significant.
The cryptocurrency exchange could not pay back investor funds following the death of the founder, who happened to be the only one with the key to QuadrigaCX’s cold storage wallet. In the case of DEX, no central body would hold user funds, and this could significantly minimize hack and loss of funds prevalent in the crypto space.
Learn how we are working towards evolving the 0x tech stack to scale decentralized exchange for a tokenized world! 📚🌍https://t.co/CwAS1Sxdt6— 0x (@0xProject) March 21, 2019
#TRON’s decentralized exchange https://t.co/z1OzwLfgsZ will soon support dozens of new trading pairs of #TRX-based tokens with $USDT by @Tether_to— Misha Lederman (@mishalederman) March 11, 2019
Increased DEX liquidity coming sooner rather than later to TRON 💹#IAmDecentralized 🖖🏽$TRX #USDT $BTT https://t.co/HJYbXiZs7U
The Apollo DEX launch is scheduled for April 1st:
The Apollo DEX (Decentralized Exchange) in our wallet will release on April 1st, 2019!— Apollo Currency (@ApolloCurrency) March 24, 2019
Mass adoption and awareness is imminent. What's Next? #apollonauts#apl #crypto #coin #currency #apollocurrency #DEX pic.twitter.com/H3cuYXHlF8