This is the first blog of a series aiming to ask WHY exchanges should be decentralized. (and why users should care)
Here at Vertex, we are building a DEX. We think it’s special and once you see it, we think you will too. We will compete with centralized exchanges. Not as the next decentralized exchange, but as an exchange– DECENTRALIZED.
Our team looked at the current market structure and found a lot that we didn’t like:
- Exchanges holding the keys to users funds
- Frozen assets
- Exorbitant fees
- Opaque liquidation mechanisms
- Complex Interfaces
- Poorly aligned ownership structures
Crypto should solve these problems, not perpetuate them.
We see a quagmire of competing interests, where a minority takes value from the majority. Users deserve something better.
Power must move out of the hands of the few and into the hands of the many. To do this we must:
- Give users total self-custody — control of your assets is an inviolable right.
- Move transactions and risk management on-chain — to remove clandestine and illicit trading behaviour.
- Lower fees — trading fees should reflect costs, not maximum extractable value.
- Make performance a priority, NOT an afterthought. Trading happens fast. Trading systems should be just as fast.
We have already released our Litepaper laying out our vision for the future of Vertex. In this series we answer the question:
WHY SHOULD EXCHANGES BE DECENTRALIZED?
(and why should you care)
We will look at what an exchange is and how it functions as an essential part of financial infrastructure. We will examine how an exchange is subject to competing tensions: a service for the many, but also a natural monopoly open to abuse by its owners at the expense of its users.
Crypto should not be TradFi in different clothes. Decentralization of exchanges is paramount.
Over the coming weeks, we will show how this should happen. Get ready to dive deep: you’ll start to see things our way.
Next week: Part 1…
The journey to something different starts with a question:
WHAT IS AN EXCHANGE?