What are the benefits of decentralized exchange platforms?


All cryptocurrency users know the shortcomings of the current centralized exchange model (CEM). Everyone knows about hacks of exchanges, and news of a fresh hack comes along fairly often. Nearly every trader I know has lost some BTC or alt-coins at least once. Does it have to be that way?

There have been some attempts to improve the system. Exchanges upgrade security, or a decentralized exchange comes along, promising change. This is good. But many of these new projects then suffer their own problems. The news around users of some exchanges not being able to withdraw or deposit funds are common news these days too.

When we talk about these decentralized exchange platforms like EtherDelta and BitShare, we see they have made some improvements and are great. But they have two new problems.

First, they don’t have enough users and therefore they lack trade volume and hence liquidity. Go to any one of them and try to buy 10 BTC and see what happens.

Second, some of these platforms use a model that means “one settlement per trade” This is not ideal for a trader making many trades, or volume players.

So, the decentralized model is good, but it still has some room for improvement.

We think the market can’t improve until these problems are addressed.

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