What is TEX? How is it different from CEX and DEX?
We first gain a basic understanding of cryptocurrency exchange platforms before discussing what TEX is.
Cryptocurrency exchanges are essentially the stock exchanges of the crypto world, where you can buy and sell blockchain-based tokens, similar to how you would trade stocks and derivatives on traditional stock exchanges.
There are two main types of exchanges currently:
Centralized Exchanges (CEXs), such as Binance, Coinbase, etc.
Decentralized Exchanges (DEXs), which gained attention following the FTX collapse.
Differences between CEX and DEX
CEX relies on a centralized institution for asset storage and trading operations. Users must trust the institution, which carries significant risk.
DEX provides decentralized asset custody, with all transactions recorded on the blockchain, ensuring transparency and security.
1. Transparency and Security
CEX: User assets are concentrated in the CEX, and their security is controlled by the exchange. Smaller exchanges are at risk of fraud and collapse, while larger ones may be targeted by hackers or other malicious actors. Historical events have shown that platforms cannot guarantee the security of funds.
DEX: Smart contracts run on the blockchain, and all transaction data and activities are publicly transparent. No one can shut down the exchange or freeze your funds. As long as users maintain security awareness and manage their private keys, asset security remains in their hands, avoiding issues like asset theft or internal operational risks in CEX.
2. User Experience
CEX: CEX is popular among ordinary users due to its low barrier to entry, simplicity, and fast transaction speeds. Users can easily trade without understanding the underlying principles of blockchain technology. A stable and trustworthy platform can attract many investors.
DEX: DEX is often not as user-friendly for inexperienced users or newcomers, with more challenging interfaces and limited information available for trading assistance. However, developers and tech-savvy users who prioritize security and privacy have been increasingly adopting DEX as CEX security incidents become more frequent.
3. Transaction Costs
CEX: Depositing usually does not involve fees, while withdrawing incurs certain fees. Trading also involves fees, which are directly deducted from the corresponding cryptocurrency and borne by the user.
DEX：Deposits and withdrawals are essentially non-existent as users authorize wallet permissions directly. Trading on DEX also involves fees, typically ranging from 0.1% to 0.3%, and miner fees incurred during the transaction are borne by the user.
In summary, both DEX and CEX have their pros and cons. Currently, the trading volume of DEX is twice that of CEX. Why can’t DEX surpass CEX?
The market shows that merely having non-custodial and decentralized properties is not enough. Instead, DEX needs to beat CEX in its own game by providing an equally good user experience, including ease of entry, transaction costs, latency, price impact, asset offerings, advanced trading features, availability, reliability, and even the recovery of lost funds.
What is TEX?
Let’s explore the new concept in the cryptocurrency industry: Transparent Exchange (TEX) after understanding CEX and DEX.
TEX is a new type of trading platform that incorporates a series of innovations in technology and product design to achieve transparency and security similar to decentralized exchanges while maintaining a trading experience comparable to centralized exchanges.
DEXs provide the best transparency and security, yet they lack in user experience. Conversely, CEXs excel in user experience but fall short in transparency and security. TEXs aim to strike an optimal balance between these two aspects, offering both transparency and security alongside an enjoyable user experience.
As technology advances, TEXs can shift towards enhanced transparency and security without sacrificing user experience or move towards an improved user experience without compromising safety and transparency. In the long run, TEXs hold a winning position.
1. Transparency and Security
TEX emphasizes the transparency of transaction data and activities through on-chain smart contracts, allowing users and third parties to supervise and audit the exchange’s trading history, fee structure, and other critical information. This helps ensure the transparency and security of the exchange, increasing users’ trust.
TEX can adopt a non-custodial asset management approach, where users’ assets and private keys are not stored on the exchange’s centralized servers but directly controlled within the users’ wallets.
2. User Experience
Transparent exchanges have made significant improvements in user experience, particularly in simplifying user operations and reducing barriers to entry.
Simplified login and registration: Transparent exchanges offer a simple login and registration process where users only need to provide basic personal information to create an account easily, just like in Web 2.0 applications. This allows users to quickly engage in trading without spending significant time learning how to operate wallets and manage private keys.
Account recovery (ERC-4337): To facilitate the secure recovery of user accounts, transparent exchanges employ smart contract accounts (ERC-4337), account abstraction, and social recovery methods. This approach typically requires users to select trusted contacts during account creation, who then participate in the account recovery process. When users need to recover their accounts, these trusted contacts can assist in completing the recovery process, which enhances the security of user assets while avoiding the risks associated with the centralized storage of private keys in traditional centralized exchanges.
In conclusion, TEX represents a novel type of exchange that brings new possibilities to the cryptocurrency trading market, allowing users to experience transparency and security without compromising usability. This advancement enables all users to participate in cryptocurrency trading with confidence, security, and ease, ultimately promoting the widespread adoption and development of the cryptocurrency market.
