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The Race To Save Sam Bankman-Fried’s Other Crypto Exchange

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Decentralized exchanges differ from centralized exchanges (FTX, Binance, Coinbase, etc.) in several important ways. Most notably, instead of relying on intermediaries to match buyers and sellers, DEXs allow users to trade on a peer-to-peer basis and manage their own funds.

The arrangement is an example of what is known as decentralized finance (DeFi), an initiative to develop a range of financial services on top of blockchain technology.and twitter thread Published in July 2020, Bankman-Fried, who now reads like a grim prophecy, explains that DeFi is “full of potential” because it doesn’t have to “rely on trust.”

Community members see the demise of FTX as a pivotal moment for DeFi, claiming it is a remedy to the problems that have plagued the crypto sector over the past year. Three Arrows Capital.

According to Hayden Adams, founder of UniSwap, the world’s largest DEX, this is a “good learning moment for the industry.” The DEX model suffers from a steeper learning curve for new users, but it eliminates the need to store coins on exchanges, so FTX Divert client funds To begin with, our sister company, Alameda Research.

Another DEX, Kwenta contributor Andrew Trudel, said that customers can never fully know what is happening to their assets within a centralized exchange. But with a DEX, everything is hosted on a public blockchain, so “it’s completely transparent how the funds are being used,” he claims. Trudel and Adams predict that traffic to decentralized exchanges will eventually surpass traditional exchanges for these reasons.

DeFi is having a moment, as FTX is undermined and the integrity of a powerful, centralized crypto company is being questioned. facing. The original goal was to prevent Serum’s collapse from spilling over into the wider Solana ecosystem, but the group now has to consider the continued management of the DEX. This is a completely different proposition.

One of the first issues in the debate is what to do with SRM, the token FTX created for Serum, of which $2.2 billion listed on the company’s balance sheetTokens that offer trading fee discounts to their holders are still supported by Open Book at the time of writing.

Some of the Open Book volunteers, including Long, would rather see the flip side of FTX. SRM support does not bring real benefits to Open Book users and just puts money in FTX’s pocket, as the value of SRM is effectively tied to the revenue generated by the exchange, Long said. increase.

The new DEX management system is also frowned upon.and thread An Open Book volunteer published on Nov. 18 explained that “upgrade rights” are currently held by a small consortium of “reputable figures” in the Solana development community. Although the new model succeeded in cutting out FTX, trader I’m asking if the overly centralized model was simply replaced by another model. A group of volunteers has yet to answer this question.

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