This is not a very formal post. I have not got a well defined, specific point which I want to drive home. This doesn't make it a bad post, just a more "free-flowing" one than usual.

Perhaps this makes a refreshing change from my usual opinionated self. Don't get too used to it, it won't last 😀

From https://kyber.network/swap/eth_knc

~ DEXs : musings ~

The uptake of DEXs has been slow thus far. This is not surprising. Centralised exchanges do a good job, nay, a great job in many cases. There has been no need for a DEX before. Granted: in the earlier days, many of the bigger exchanges did abuse their position a bit by taking what may be considered "unfair" liberties e.g. overcharging on transaction fees. Fortunately competition brought about changes to the market and the modern centralised exchanges are far better and more than adequate. For now.

To ensure freedom from regulation, fair trading fees, security, anonymity, availability etc in the years to come, decentralised exchanges will become a must. As the market grows, the threats to it grow too. It doesn't matter whether those threats are from hackers, governments or whomever else, eventually centralised exchanges will fall prey to them, or spend millions trying to protect against them. Even in an environment free of such external threats, a centralised exchange is a threat unto itself. It only takes one compromised employee to destroy years of hard work in building up a reputation. It only takes one new CEO to lead a business down the wrong path and ruin it forever. And the most human threat of all: it only takes common or garden greed for shareholders to steer a business in a direction which benefits them (through the picture provided by their short-term goggles) to the detriment of all others. I read today how the shareholders of a major airline baulked at the news that pilots and flight crews were receiving a raise across the board. They were highly concerned about their profits. Can they not see that without properly paid staff they will ruin company morale / lose all their best and brightest staff / start to have safety related incidents etc? The short-sightedness of the average greedy human never ceases to amaze me, and those controlling crypto exchanges, while generally good people, are not immune to such flaws, especially in the long-term.

So decentralisation is a must, and it has already been available for some time. But compared to their centralised counterparts, DEXs are still very much in their infancy.

What is happening?

I think we are now at the point where one or two DEXs are starting to become serious competitors. I think that the sentiment will increasingly sway towards them. Yes, I do think that this is a good time to invest in them!

I've been rattling DEX-related thoughts around in my head for the last week or so, knowing that I wanted to blog about the topic. The thing that sparked this post for me today is this piece of news: https://medium.com/@ianholtz/aphelion-dex-trading-commences-68b85ecb6aba. It wasn't that exact post, it was actually an email survey that I participated in yesterday, one suggesting the next batch of tokens to be listed on Aphelion, but that is not crucial to my point.

My point is that Aphelion went live today. As a DEX. On the NEO chain. Some of you may already know Aphelion as a wallet. It's a great wallet, and I use it (in conjunction with my Ledger) for my NEO and NEO tokens. I even prefer it to Neon (though in fairness, it's been a long time since I've used a modern version of Neon). Aphelion has been gaining price sharply for the last few days, so that fact that it was launching did not go unnoticed. More importantly: Aphelion is not the first NEO-based DEX out of the gate. Switcheo ( https://switcheo.network ) has been up and running for a few months already, and has already built up quite the fan base.

I would be remiss not to mention the older DEXs which have been operating for some time already. To cherry pick some important ones: BitShares (or OpenLedger) is a great one. It's got a steep learning curve and is certainly not intuitive (at least it didn't used to be, it's been a long time since I traded on it), but it is very capable and does the job well. It also has some very interesting assets on the platform, things like bitGold or the various stablecoins like bitCNY or bitUSD. IDEX is a very capable DEX, one that I have used more than I've used most centralised exchanges. If you can use an exchange like Cryptopia, then you can use IDEX. I know that the Waves exchange gets a lot of good press, even though I have never tried it myself. For me the biggest issue with such exchanges has probably been low liquidity, though that is getting better all the time, and will certainly improve greatly in the future. Kyber is another interesting example, it allows apps to be built with its protocol embedded into them, allowing for instant swaps. It also has its own site (as pictured above) where it can be used as a more typical exchange. NEXT is also getting out of the starting blocks ( https://next.exchange ), with an interface which they say "will be easy enough for Grandma to use". This is in contrast to exchanges like EtherDelta/ForkDelta which I have honestly found to be almost more trouble then they are worth at times.

Of course the gold standard that I am really waiting for is NEX. As a registered security that is months in the making, built by a well known and proven team and making bold claims, it should make all other DEXs look positively archaic when it launches. I believe it will live up to the hype; in fact I think it will be better than the hype, even though it took a long time to finally get its ICO launched (waiting for regulation). I think it is significant that the brightest looking new DEXs are being launched on NEO: Switcheo, Aphelion and NEX are all NEO based. It's a good sign for the coin which I still firmaly consider to be the best of all platform coins, for a multitude of reasons. I have heard talk of a future EOS DEX, but I have not looked into it. Honestly I'm still not convinced by all the hype surrounding EOS in general.

Decentralising the centralised

Another thing you really want to keep your eye on is Binance exchange. I've said this many times, but I will continue to say it: that exchange is going places. Binance is already basically the "King of the castle" of crypto exchanges, but mark my words: it's nothing compared to what it will become! Plans are still to convert the centralised exchange into a DEX. The native token, BNB, will probably feature prominently in this conversion. I have a handwritten note sitting on my desk, permanently reminding me that I need to try to a purchase more BNB. As a medium-term buy, I consider BNB to be practically unbeatable right now.

I think that Binance's greatest strength is not a "what", but rather a "who". Changpeng Zhao, CEO of Binance, is a true crypto visionary. He is also one of the very small handful of people whom I consider to be worthy of calling themselves a "Crypto expert" (read that link, I made very valid points...). To quote from that post:

These are people with a solid understanding of blockchain fundamentals, an excellent grasp of the future of crypto and how it fits into the global economy, and experience in developing major cryptocurrencies. Anyone else is just a wannabe, at least for now.

Changpeng Zhao is steering Binance in all the right directions. Every week I read another impressive report about him. It is clear to see from the way that he speaks that he really understands the future of the crypto market and the way that it will fit into and affect the global economy. He is an enlightened individual with profound insight and I have the utmost respect for him. Read this to see this week's news: how he plans to bring BTC, ETH, LTC and of course BNB to airports around the world (and his very valid justification for doing so). Or follow him here https://twitter.com/cz_binance on Twitter.

Keep an eye on the DEX's. My advice is to get into them while they are still cheap.

Yours in crypto that you can trade on a DEX,
Bit Brain

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by Bit Brain

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