There is a growing need for decentralized exchanges in the world of cryptocurrency. Not only do these platforms remove intermediaries from the equation, but they are also less burdened by Know Your Customer and anti-money laundering laws. Most cryptocurrency users just want to exchange value without problems. Whether or not ERC dEXCHANGE will be of great help in this regard remains to be determined. The platform sounds rather appealing on paper, though.
Another Decentralized Exchange Model Surfaces
If there is one area of cryptocurrency in which one can’t have enough competition, it has to be the decentralized exchange sector. More specifically, there are still very few businesses embracing the decentralized model when it comes to exchanging value. That is not entirely surprising, as centralized platforms tend to make a lot of money doing what they do. However, they are also being scrutinized more now than ever before, regardless of their physical location.
Moreover, customers are increasingly asking for decentralized business models. Every traditional exchange is a custodian of customers’ funds, which means they effectively control the money one entrusts them with. It is far from an ideal situation, but that shouldn’t come as a big surprise to anyone either. Slowly but surely, we are seeing decentralized projects come to fruition, although the “killer app” has not been created yet.
The team behind ERC dEXCHANGE thinks they have what it takes to make decentralized exchanges the new norm. That is much easier said than done, mind you, as one doesn’t create such solutions overnight by any means. Interestingly enough, this particular project uses the 0x protocol, which is specifically designed to facilitate decentralized trading for ERC20 tokens. ERC dEX positions itself as a 0x Relayer by hosting an order book filled with users’ orders in a decentralized manner.
To be sure, ERC dEXCHANGE is still in the very early stages, as the private alpha test is currently underway. Right now, the developers are still working on a proper trading interface. It needs to be as intuitive as possible, rather than a horrible visual representation of the concept’s possibilities. Moreover, the engineers are prioritizing the removal of stale orders, which is something most centralized exchanges deal with on a daily basis. Plus, there needs to be an API to hook up to, as it will serve to maximize liquidity.
Farther down the road, ERC dEXCHANGE has some bold ambitions. Whether or not it can succeed is anybody’s guess. The 0x protocol certainly opens up a lot of new opportunities for exploration. It seems lending, short selling, and trustless derivatives are some of the team’s future plans. None of these features will be easily integrated into a decentralized platform, though. There is still plenty of work to be done before this idea becomes even remotely feasible.
It will be interesting to see how many projects will use the 0x protocol in the future. Decentralized solutions are the future of cryptocurrency, as they will put all bank and government woes behind us once and for all. If there is no centralized entity to control or scrutinize, there will be far less “noise” generated by governments and financial institutions. It will be interesting to see what the future holds in this regard.