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The Evolution of Decentralized Exchanges

This article looks at how the DEX landscape has changed since its early days.

DEXes are vital for decentralized finance operations.

Cryptocurrency trading platforms that let users trade permissionlessly and peer-to-peer have revolutionized the cryptocurrency industry.

Although contemporary DEXes boast a plethora of features and are straightforward for users, they have progressed tremendously since their early days.

DEXes have come a long way in recent years, and here’s a look at how they’ve progressed.

Decentralized exchanges first arose in 2016.

Around this time, platforms such as IDEX, EtherDelta, and ForkDelta began to crop up. These allowed users to trade cryptocurrencies with one another directly, reducing the need for OTC groups and eliminating the need for trust between parties.

However, these first-generation platforms had the same problems:

Slow, clunky UX

Limited liquidity

Partially centralized order books

Although non-custodial, many first-generation DEXes weren’t entirely decentralized and could be better classified as hybrid platforms. Consequently, they were more likely to regulatory attacks, leaving some platforms with no choice but to restrict IPs from particular regions and put into place KYC/AML policies.

The main issue, however, was their complicated user interfaces that most often needed users to transfer their tokens to the smart contracts of the platform or set up an account merely to establish limit orders. To make matters worse, the platforms were very slow too which made it challenging to trade without any hitches.

Automated market maker (AMM) exchanges have adapted and evolved to address the issues that first-generation DEXes struggled with.

The DEX space began rapidly gaining popularity in November 2018 with the release of the first major AMM, Uniswap.

This platform totally changed how people think about peer-to-peer trading by introducing decentralized liquidity pools and pricing curves.

Uniswap allowed users to deposit their assets into two-sided liquidity pools that determined the relative value of each asset by using a mathematical formula (most likely the constant product formula). Not only did this help with the liquidity problem, but Uniswap also efficiently priced newer and more speculative assets. This helped create an explosion of ERC-20 assets.

AMM became quickly popular after its development and is now employed by the great majority of decentralized exchanges. In contrast, only a small number can be considered order book DEXes. Many well-known DeFiblockchains have their own AMMs(or various types), which can be seen as Uniswap clones or offshoots. A few examples are PancakeSwap DEX (connected to BNB Chain), SpiritSwap (for Fantom network usage), and Pangolin (offshoot of Avalanche).

DEXes, or decentralized exchanges, have become popular among cryptocurrency investors for their ability to trade assets without the need for a third party. Most DEXes also offer additional features such as yield farms, decentralized lending services and launchpads.

The introduction of these new features not only resulted in a higher yield, but also opened up decentralized lending protocols like Euler and revenue-sharing permissionless liquidity pools. This allowed users to get the most out of their capital.

The majority of decentralized exchanges today don’t favor any particular asset, meaning that users can trade whatever they want as long as there’s a corresponding liquidity pool.

Recently, a new generation of DEXes has surfaced that are more platform-specific. These platforms usually have one purpose and allow users to trade aLimited number of assets within the ecosystem.

Named after the Japanese Sword, Katana is a DEX built on Ronin Chain that’s available to Axie Infinity users. It lets them trade in-house assets such as Smooth Love Potion (SLP) and AXS for other popular cryptocurrencies like Ronin (RON) and USD Coin (USDC).

XCAD Network is also developing a DEX focused on creator tokens. Users of the platform will be able to trade various permissionless creator tokens against stablecoins, providing a closed trading atmosphere for XCAD users.

Although some DApps boast millions of active users, platform-specific DEXes still rack up an impressive trading volume. The Katana DEX, for example – which only caters to Axie Infinity players – has frequently achieved $100M+ in daily trading volume and averages over $2M/day.

Most of today’s DEXes either operate on a single chain or an independent version of the DApp is available on multiple chains with no cross-chain trading capabilities. Thanks to recent advances in cross-chain technologies like bridges and atomic swaps, though, the first generation of cross-chain DEXes are now operational. These include Atlas DEX, Swappery, SushiXSwap, THORswap and several others.

Most platforms that offer cross-chain swaps use a mix of bridges and decentralized liquidity pools, while others get their liquidity from DEXes on different blockchains. These usually utilize bridges to move tokens between chains.

Cosmos features many cross-chain DEXes too, like Osmosis and Crescent; however, these are limited to the Cosmos ecosystem and cannot connect assets from non-Cosmos SDK blockchains.

While a few atomic swap DEXes, like Atomex, exist currently, none has been adopted by the majority.

The digital currency exchange (DEX) industry is rapidly innovating and can be considered one of the fastest-moving sectors of the decentralized finance (DeFi) space.

In a little more than half a decade, the number of decentralized exchanges has exploded. Some of these newer options are starting to stack up against centralized platforms when it comes to liquidity, features and user-friendliness.

A new generation of DEXes is being created as we speak, and Sudoswap is leading the way. They just launched sudoAMM, a DEX that uses AMM-like bonding curves to change how users buy and sell NFTs. With this innovative approach, Sudoswap is paving the way for a new era of decentralized exchanges.

A tokenized equity DEX called Nasdex was recently launched, which allows users to trade tokenized equities over the blockchain. In addition, the Terra-based DeFi hub Mirror Protocol enables users to trade synthetic equities including AMZN, AMD, and COIN. Furthermore, central bank digital currencies (CBDCs) might get their own DEX treatment in the future.

A regulated CBDC DEX is currently being explored by central banks in more than 100 regions worldwide, and there is a small chance that a permissionless DEX will be launched— since most CBDCs are likely to launch on permissioned blockchains.

However, this will take several years at the earliest.

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How FTX Saga can affect Twitter’s crypto features?

Anyhow of all the news that’s been overlooked in the crypto market as the FTX Saga has held our gaze, the headlines related to Twitter are arguably the most important.

That’s because new Twitter owner Elon Musk recently warned that the social media platform could go bankrupt.

If Twitter does go bankrupt it would be very bad news for crypto simply because the algorithmic bubble that is known as Crypto Twitter provides the most up-to-date info about the crypto market.

A person could possibly get it would also mean no crypto integrations on the platform either.

Luckily Twitter seems to be in a good position as its number of daily active users recently hit an all-time high of over 45 million.

According to Elon this number has been rising ever since he announced his intention to acquire the platform in mid-April.

In theory this makes it the perfect time to introduce verification for all users at a low cost of eight dollars a month which is arguably worth it just for the entertainment it is provided on the platform these past few weeks.

In practice however this means that there are more people looking to game the Twitter system than ever before.

Low and behold this is exactly what happened when Twitter allowed anyone to buy a blue tick.

It didn’t take long for impersonators to start popping up not surprisingly Twitter’s decision to put an official label in gray on real accounts didn’t really stick out to users.

This is why I personally think Twitter should have kept the blue tick mark process as is and introduced a new verification mechanism instead.

I suppose it’s a bit too late for that now because the botched rollout of Twitter’s verification has done its damage.

Lots of famous people were impersonated including former heads of state and while it was amusing it was equally concerning the most famous case was an account that pretended to be a pharmaceutical company promised free medication for all and caused the stock of the actual company to crash.

Unfortunately Twitter’s attempts to ban these impersonator accounts were unsuccessful and the platform was forced to pause its new verification features until further notice, this means that Twitter is losing out on much needed revenue but so far it continues to stay afloat.

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Blockchain Education Review

Blockchain Education is a Cryptocurrency trading service and educational programme which they devote to teaching you how to trade Cryptocurrency. Here at BRG we have been a member at Blockchain Education since the very beginning and we highly recommend it to anyone who is interested in trading Cryptocurrency.

Blockchain Education – real time calls and auto trading

Get real-time calls for Cryptocurrency trades from professionals who have a proven track record. 24/7 technical analysis. There is always someone available via their chat system to advise you on your trades. Ask questions and discuss via their active chat system where you can meet similar people interested in making a profit from cryptocurrencies (who isn’t?) as well as ask questions to their helpful community. Watch their training programme which has over 100 hours of videos to teach you what to look for when trading. BRG is a big fan of Blockchain Education.

Their most recent addition is auto trading which has really taken things to the next level. Using your Binance API you can get automatically entered into their calls. You set your desired % profit you are looking for and the trade will be automatically sell at this %.

In just over one year and six months, they have done over 2700 live calls. They now have over 5 successful traders available making calls and are available to you to help you learn to trade for yourself.

They even have a practice exchange which is great for learning purposes where you can trade but not risk any money. If you are new to trading we suggest you always start with the practice mode.

They give you the tools you need to be a successful trader or alternatively they give you a passive income through their auto trading.
Best thing about Blockchain Education: Best thing is the calls system. They give you calls from professional traders which have a very impressive proven track record.

Worse thing about Blockchain Education: Due to the high price this service is not for those on a small budget.

 

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3-Minute Bitcoin Guides: Understanding Bitcoin Fees and How to Cut Them Down

As Bitcoin’s value continues to increase, so do the transaction fees. You can reduce your BTC fees by consolidating data packets, transacting during off-peak periods, and using SegWit.

Since Bitcoin and other cryptocurrencies began to rise in 2020, the fees associated with Bitcoin transactions have been under greater scrutiny. As prices reached new all-time highs throughout 2021, this only increased the amount of attention paid to these fees. The reason for this is that when a BTC user has a higher value transaction, they also have to pay a higher fee.

There are four primary elements that affect how much you pay in transaction fees for Bitcoin: the number of inputs, the number of outputs, script complexity and multi-signature capability.

When BTC users initiate transactions, they include different bits of information. As more inputs are added to a transaction, the size of the data packet increases. Since Bitcoin blocks are limited to 4 MB, large transactions limit the number of BTC transactions that can be included in a block. Consequently, large BTC transactions will have higher fees than smaller ones.

BTC users who start transactions are also charged for the outputs. The outputs refer to what is sent to both the transaction initiators and recipients after miners have processed the transaction. Those who initiate BTC transactions must pay beforehand for the required outputs that need to be generated and sent to various BTC user account addresses.

If a BTC transaction uses script complexity to reduce the size of a data packet, increase the security of the transaction, or for some other reason, there will most likely be a fee assessed for the ‘privilege’ of using the complex script.

The multi-signature feature lowers the cost of smart contracts and BTC payments by requiring a specific number of signatures before a transaction can be completed on a platform. For using the multi-signature option, platforms charge high transaction fees to Bitcoin users. The multi-signature functionality saves BTC smart contract users money but increases their costs in transaction charges.

Try to limit the size of data packets sent for processing on the blockchain. If possible, use shortcuts or special features that can help make your transactions quicker and take up less space.

When fewer people are using the platform, transaction fees are lower and transactions processed quicker. So, it’s advantageous to process your transactions during these times.

By utilizing SegWit, you can essentially shrink the size of your data packet. The result? You guessed it- lower transaction fees and a quicker processing time for your transaction.

The Lightning Network allows you to process your transactions on a side-chain and then have the results of the transaction sent to the main blockchain. You can also process a string of transactions and then consolidate them on the Lightning Network. This will help reduce your transaction fees, speed up your transactions, and ensure that the results are recorded on the blockchain’s ledger.

Choose your cryptocurrency exchange depending on which services are most important to you, the fees they charge, and how well they fit other key criteria such as security or available payment methods.

If you want to avoid high transaction fees, choose bank transfer as your payment method. PayPal and credit/debit cards tend to have the highest fees. But before sending a transaction to the mempool, think about which payment method you’ll use and how it will affect the cost of your transaction.

You are charged less per transaction when you send one large transaction rather than multiple small ones.

Make sure you’re aware of all of the costs you may incur when using that platform before deciding on a platform to execute your transactions. You should compare numerous platforms and select the ones that assess you the least money for processing your transactions while still being efficient.

Use these methods the next time you do a Bitcoin transaction to help lower fees!