Conclusion

The data above shows that even after 2 years and millions of dollars in funding, decentralized exchange protocols are still fighting to overtake CEXs and offer the same level of functionality, liquidity, and service. That said, there is progress; token swap protocols are doing better and gaining traction.

If you’ve ever used Uniswap or Kyber, you will clearly see the difference how making a token swap service decentralized leads to a better user-experience and efficient exchange. But this is not true in case of DEXs. We need Decentralize Exchanges to integrate efficient market making and Algo trading software without wasting a ton of money on Gas (cost of making a change to the Ethereum blockchain). Eth2.0’s features aim to help DEX protocols in terms of transaction throughput and cost.

IDEX is a clear winner because of its semi-centralized/decentralized model, where you need to deposit tokens on IDEX’s Smart Contract w/ settlements on-chain, but everything else goes from IDEX’s centralized servers and database.

Decentralized Protocol projects such as 0x (ZRX) and Loopring (LRC) have been working hard. Recently, Loopring patented several solutions for the front-running problem and introduced zkSnarks to increase transaction throughput (in an effort to solve the liquidity problem). The 0x team is also experimenting with Starks to solve the liquidity problem. We think that with time, these projects will solve these problems and continue to move DEXs towards the same functionality and efficiency of CEXs.

Decentralization is not the value proposition and projects already understand it. You can’t sell inefficient products in the name of idealist values, no one cares 🧐

#DeFi is on the Move

Decentralized Finance is growing exponentially and we’ll dig more into DeFi stats in the next article, so make sure you subscribe to our newsletter below!

About QuikNode

QuikNode is building infrastructure to support the future of Web3. Since 2017, we’ve worked with hundreds of developers & companies, helping scale dApps and providing high-performance Ethereum nodes. We’re working on something interesting from the past few months and will be launching soon, so subscribe our newsletter for more updates!! 😃

Data source — Bloxy