CEX has many benefits, but from the bankruptcy of FTX to the attack on Bybit and the Bitget controversy, incidents in CEX are numerous. Some have been risky but ultimately safe, some are full of controversy, and others have vanished completely…
Large CEXs are certainly relatively safe, but the number of tradable coins is limited.
Small CEXs have many coins, but small CEXs are hard to explain…
Let's not talk about CEX today; there are too many personal connections and incidents. The theme of this article is DEX, and there is a strong demand for DEX in the market.
➤ Future competitive landscape of exchanges
Brother Feng's viewpoint is:
✦ Large exchanges: The leading position of large exchanges like Binance is very stable, and in the future competitive landscape of exchanges, it is highly likely to maintain a dominant position. Large exchanges are still primarily CEX, mainly targeting the mainstream coin market and selected on-chain assets.
✦ Medium and small exchanges: Medium and small exchanges should include some strong and reputable CEX and DEX, while also being compatible with mainstream coins and on-chain ecosystems.
✦ Small exchanges: Small exchanges may primarily be DEX, mainly targeting on-chain markets.
Do you agree?
➤ User experience of medium DEX
Compared to CEX, DEX avoids centralization risks, but at the same time brings user experience challenges. In contrast, the experience advantages of CEX include:
First, CEX does not have cross-chain experience; deposits into the platform allow for seamless trading.
Second, CEX has a relatively rich array of trading strategy products.
Third, CEX executes trades off-chain, which leads to lower transaction fees, thereby creating economies of scale and better trading depth.
As for Uniswap and PancakeSwap, they mainly serve as LP pools rather than exchange-like products.
For small DEX, they primarily target on-chain or even single-chain liquidity, so there are no high demands for cross-chain, strategy products, fees, and trading depth.
However, for medium DEX, providing a better experience in these three aspects is necessary for competition and also a user demand.
Currently, in Brother Feng's view, there are two DEX experiences that are closer to CEX: the current DeGate and the future UniversalX.
➤ Current DeGate
❚ Seamless cross-chain experience
DeGate is a Layer2-based DEX that supports trading of mainstream coins and assets on Solana, Base, and BSC chains.
✦ Invisible cross-chain trading
Using USDC or USDT allows for trading directly without cross-chain operations.
Mainstream coin trading uses an order book model, supporting market orders or limit orders. Placing buy and sell orders has the same experience as CEX!
Using USDC, trading on Solana, Base, and BSC chains can be done with one click, without cross-chain operations.
✦ Universal Gas
On the other hand, using USDC, USDT, or ETH as GAS does not require preparing public chain coins on various chains as GAS.
When selling coins, even if there is no GAS in the account, there is no need to worry; after selling, GAS can be directly deducted from the transaction amount, which is very convenient.
❚ Grid and financial products
DeGate has launched not only grid products but also a strategy plaza, where users can copy grid strategies with one click.
This week, new on-chain financial products were also launched:
Grid and strategy plaza, financial products, make DeGate in terms of trading strategies the most CEX-like DEX, without a doubt.
❚ No fees for placing orders, very small spread in trading orders
The gas fees for DeGate Layer2 are very low and almost negligible. More importantly, for mainstream coin trading, placing orders incurs no fees, which makes DeGate's trading costs lower.
We do not look at popular coins; let's look at the trading interface of this coin ranked 40th in popularity on DeGate, where the spread in buy and sell orders is very small:
As for DeGate's on-chain asset trading, it depends on the liquidity of on-chain LP pools.
➤ Future UniversalX
❚ Universal accounts and universal gas
UniversalX supports a chain abstraction alliance ecosystem that includes many ecosystems such as Solana, Ethereum, Base, BSC, Sonic, Bear Chain, Avalanche, Arb, OP, Polygon, Merlin, etc.
Its underlying infrastructure is the chain abstraction infrastructure connected by these ecosystems, and Particle's chain abstraction technology has achieved universal accounts and universal gas across all chains.
Users can trade assets on any chain in the chain abstraction alliance using universal accounts, just like trading in CEX. There is no need to purchase any public chain coins; transactions can be completed using universal gas.
User transactions still occur on-chain; however, users are not aware of cross-chain activities, as this series of cross-chain actions is accomplished through cross-abstraction technology.
❚ Token information and data
In comparison, UniversalX focuses more on on-chain users and provides comprehensive token information to assist users in trading, including liquidity, holder addresses, security status, etc.
There is still room for improvement in trading strategies, such as the doubling of principal function, etc.
❚ Trading depth depends on liquidity
UniversalX temporarily does not support limit orders; the counterpart for user trading is the LP of various on-chain tokens. The trading depth of UniversalX depends on the liquidity of on-chain LP pools.
➤ In conclusion
The common points between DeGate and UniversalX are:
First, both support seamless cross-chain trading and universal gas.
Second, both will automatically generate EVM and Solana abstract accounts for users to complete on-chain transactions.
Third, when trading meme coins, the trading depth is determined by the depth of on-chain LP pools.
Fourth, both have mobile applications available for download.
Fifth, both have undergone code security audits by multiple auditing agencies.
The differences are:
@UseUniversalX is based on chain abstraction infrastructure, fully decentralized, supports almost the entire chain ecosystem, and users can trade almost all chain assets with one click. Based on the development efforts of the particle team, UniversalX has more imaginative space in product functionality and user experience, and its future experience may be closer to CEX while maintaining high decentralization.
@DeGateDex is equivalent to a combination of Hyperliquid and UniversalX. Mainstream coin trading uses an order book model, similar to Hyperliquid, and has grid trading, grid strategy plaza, and financial products with very small spreads, making its experience closer to CEX. On-chain trading is similar to UniversalX, using chain abstraction technology to achieve invisible cross-chain trading, with imaginative space in on-chain token information and trading strategies.
For rapid meme coin trading, UniversalX is more recommended—
For trading meme coins and mainstream coins, DeGate is more recommended—