The sad and heartbreaking story with FTX exchange, hacker attack and Alameda foundation in November made the entire crypto industry nervous. At first glance, all this definitely does not bring anything good to the crypto market, but there was a positive side to what happened.
Thank you, Sam 😅, now people have begun to realize that bitcoins on a centralized exchange are — a mirage. The events of November allowed the crypto community to reconsider its views on CEX and turn to the origins — DEX.
People remembered: “not your keys — not your bitcoins.”
Frightened investors began withdrawing their funds from quite respectable CEX exchanges.
According to CoinDesk, Binance has faced record withdrawal rates of Bitcoins, Ethereum and stablecoins. In six days since the events began, users have withdrawn 81.7 thousand BTC (worth $1.35 billion) or more than 15% of their total amount on the exchange (according to CryptoQuant). During the same period, were withdrawn 125 thousand Ethereum ($155 million) and $1.14 billion in stablecoins from Binance.
The massive withdrawal of funds affected not only Binance. According to CoinGlass, almost 200 thousand bitcoins were withdrawn from crypto exchanges in just a week. As a result, the number of BTC that are stored on exchanges has decreased to 1.88 million coins.
What is the difference between DEX and CEX?
Using CEX, it is worth remembering that the exchange receives customer funds initially to hot wallets that conditionally belong to customers, and the private keys are in the hands of the exchange.
On DEX, the distributed registry technology excludes anyone from managing the wallet, except the user himself. Participants make transactions without the participation of intermediaries, but directly with each other.
But not everyone believes that the situation with DEX will improve much in the near future. JPMorgan's analysts concluded that the superiority of centralized platforms over their decentralized counterparts will continue.
Some of the reasons that analysts have mentioned:
- slow transaction processing speed;
- the absence of a limit order/stop loss feature;
- vulnerability to hacks;
- pooling of assets.
What DEX do we need, and what does Sei Network have to do with it?
Users choose CEX for convenience, and from the fact that Dex have certain disadvantages. Therefore, I like the idea of taking the best of the traditional CEX and transferring it to the DEX base. By eliminating the disadvantages of DEX, adding the advantages of CEX, we will get something that everyone will use! The Sea Network project is working in this direction.
Sei Network — is an L1 blockchain based on the Cosmos SDK focused on creating the next generation of DeFi infrastructure, transferring the advantages of CEX in a decentralized manner.
What are the special features of Sei?
Most L1 projects fall into two extremes: either they are created for fairly general purposes, like Solana and Ethereum, or for very specific use cases, like dYdX and Osmosis. Sei is in between them — which allows the project to create an environment specifically designed for DEX applications.
Sei opens up new opportunities due to its features:
✅ Native order matching engine — drives scalability of orderbook DEXs built on Sei
✅ Breaking Tendermint — Sei is the fastest chain to finality at ~600ms
✅ Twin-turbo consensus — improves latency and throughput
✅ Frontrunning protection — combats malicious frontrunning that is rampant in other ecosystems
✅ Market-based parallelization — specialized parallelization for DeFi
The combination of these optimizations make it possible for new types of financial products to emerge — everything ranging from live sports betting to complex options and futures.
The value of the Sea Network project is that by having oracle modules and combining order books from all decentralized exchanges, we get greater liquidity, fair price and trading security. By combining all this with the Cosmos database, we will get low transaction fees and fast block completion.
Sei, announced a $50M Sea Ecosystem and Liquidity Fund to support the development of new apps on Sei and help teams bootstrap liquidity going into mainnet launch. Anyone can create a DeFi app using Sei’s liquidity and the benefits of the entire ecosystem. Developers, traders and users can connect to Sei as ecosystem partners, benefiting from the overall liquidity.
The Sei Network project is still at an early stage, so we will wait for new events and information from the team regarding the launch in the main network, because we need improved DEX so much 😉
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Website: https://www.seinetwork.io/
Twitter: https://twitter.com/seinetwork
Telegram: https://t.me/seinetwork
GitHub: https://github.com/sei-protocol
Gitbook: https://docs.seinetwork.io/introduction/overview
Block Explorer: https://sei.explorers.guru/
Medium: https://medium.com/@seinetwork
