🚨 The cryptocurrency world has been turbulent recently! Exchange scandals, controversies surrounding Hyperliquid, DEX failures, trust crises are exploding!
📷😱 Centralized exchanges (CEX) frequently have problems, decentralized exchanges (DEX) are also stuck; how to balance the 'impossible triangle' of blockchain? Why do I say DEX (like Hyperliquid) will be the trend? Let’s discuss!
📷 The problems of CEXs are a headache.
Frequent turbulence in exchanges, rumors of fund misappropriation and manipulation are rampant; Hyperliquid (decentralized contract exchange) is also questioned due to transparency and operational issues. The old problems of CEXs are laid bare:
User assets are 'custodied'; the platform can freeze them at will!
Transaction data is operated in a black box; play it however you want!
Regulations force KYC, exposing privacy; is it annoying?
📷 The advantage of CEXs is speed: transactions are instant, the interface is smooth, and liquidity is strong. But at what cost? Your coins are managed by the platform; where has the spirit of blockchain decentralization gone?
📷 DEXs (like Uniswap, Hyperliquid) use smart contracts, on-chain transactions are transparent, and you manage your own private keys, so the platform can't run away! Especially Hyperliquid, which focuses on decentralized contracts and attracts many derivative players. But the shortcomings of DEXs are also obvious:
Ethereum gas fees are high, transactions are slow, and high-frequency contract players are going crazy.
Smart contracts have risks; Poly Network was hacked for 600 million dollars in 2021.
📷 Newbies need to study DEXs for half a day: wallets, gas fees, it's too complicated!
Recently, DEXs have been experiencing constant failures: on-chain congestion, contract upgrades going wrong, liquidity pools being messed up... it's frustrating, but DEX trading volume has risen from 5% in 2020 to 20-30% in 2023!
📷 The total market value of DeFi surged from 48 billion dollars to 150 billion, with DEXs as the main force!
📷 How to break the 'impossible triangle'?
CEX: Full marks for speed (scalability) and security (cold wallets, multi-signature), but decentralization? Basically zero!
DEX: Full marks for decentralization and transparency; security relies on code, but speed and cost are holding it back.
How to balance it now?
Layer 2 comes to the rescue: Optimism, zkSync reduce costs by 90%, speed up to 2000 TPS, approaching CEX!
Cross-chain protocols: Cosmos and Polkadot allow coins to flow freely across chains, boosting liquidity!
Hybrid model: like Hyperliquid, combining contract markets and on-chain settlement, balancing efficiency and transparency!
But safety is still a big pitfall: CEXs being hacked, DEX contract vulnerabilities, each must be handled with care.
📷 Why is DEX the big trend?
I stand with DEX! Decentralized contract platforms like Hyperliquid are the future! Here’s why:
📷 Trust transfer: CEXs are constantly in turmoil; after FTX collapsed, users flocked to DEXs, and Uniswap's trading volume temporarily surpassed Coinbase!
📷 Technology is advancing rapidly: Layer 2 makes DEXs fast and cheap, dYdX's costs plummeted after moving to Cosmos! Hyperliquid is also optimizing performance.
📷 Regulatory push: CEXs are under SEC scrutiny, KYC is annoying; DEXs have no center, making regulation difficult, loved by privacy advocates!
📷 Community power: DEXs are governed by DAOs, and coin holders have a voice, unlike CEXs that can delist coins at will.
The data is hardcore: In 2023, DEX daily trading volume accounts for 20-30%, with derivative DEXs (like Hyperliquid) particularly popular!
📷 Where to go in the future?
Technology: Layer 2 and Ethereum sharding increase speed to 100,000 TPS, outperforming Visa! Contract audits are stricter, and insurance (like Nexus Mutual) is there to back it up.
Experience: A simpler interface, MetaMask can handle it with one click, don’t confuse the newbies.
Ecosystem: DEXs do more than just trading; lending, derivatives, NFTs, and the metaverse are all possible! Decentralized identity (DID) can also maintain privacy compliance.
Regulation: Collaborating with regulatory sandboxes, like Uniswap Labs, compliant but not losing soul. In the long run, DEX will be at the core of DeFi, and contract DEXs like Hyperliquid may lead the charge! CEX? It seems destined to become a niche player. In the era of blockchain 3.0, DEX is set to reign supreme!
📷 What do you think? Is there hope for CEXs? Will DEXs dominate the future? Let’s discuss!