Exchanges are a key part of the blockchain space. They form the backbone for the transactions and extractions happening within the industry. Without these exchanges, trading and several other blockchain activities will be hindered.
For a long period, the blockchain industry has been run by both centralized exchanges and decentralized exchanges. Centralized exchanges are run by specific parties. Examples of this include Coinbase, Bitterex, and Poloniex. However, although this has been the major exchange type in the industry, it runs counter to blockchain’s mission. Blockchain seeks to democratize processes and reduce the concentration rate in trading architectures.
Decentralized exchanges, on the other hand, are those that do not involve intermediaries. While no exchange is fully decentralized, most decentralized exchanges offer direct interaction between transacting parties, making the process more transparent and less controlled. Yet, these two exchange types are fraught with numerous challenges.
No doubt, centralized exchanges offer transacting parties top speed. They deliver efficiently and support huge trading volumes. However, it’s too risky to trust them. Why? Because they are intermediaries between transactions and have access to transactions’ data. They also have the custody of funds, making funds easily susceptible in the event of a hack. This is a major concern considering that there is no government support to insure funds. Blockchain promises people excellent privacy and security. However, the presence of intermediaries casts a shadow of doubt on that.
But decentralized exchanges are not the solution either. While they do not wield the intermediary capacity of CEXs, they are unable to offer speed and efficiency. Most decentralized exchanges are too slow, which effectively renders them out of consideration for high frequency traders and more sophisticated trading desks. But since hDEX’s architecture isn’t based on blockchain, it bridges this gap efficiently.
hDEX Solves The Flaws
The features of the two exchanges above indicate strengths and weaknesses. The optimal system will leverage the strengths of the two systems to deliver an even more efficient solution that changes the narrative. This is what gave rise to hybrid decentralized exchanges. The system combines the positive features of the CEX and DEX to offer excellent blockchain solutions.
Order matching happens on hDEX with a blazing speed. The slowest order matching time frame is under 1ms. This architecture offers 100x speed of what you’ll get with the fastest DEX. This increases the rate at which trading activities occur and provides traders with instant solutions.
Since it combines the features of DEX and CEX, hDEX offers impressive transparency through its open-source non-custodial smart contracts. This offers you sovereignty over your funds while ensuring you understand the entire transaction process. Nothing hidden or shady.
hDEX is the true definition of democratizing the blockchain community. How so? A major problem with most exchanges arises from the efficiency of their order matching processes. The infrastructure of some exchanges makes trades exclusive to a part of the community. However, with hDEX, trades are broadcast in the open and agreed upon by the community. Thus, there is greater access and more inclusion. Similarly, when there are trades to settle, SDOs are selected at random, giving every oracle an opportunity to earn fees from this architecture.
Tacen Is Changing The Narrative
The blockchain industry continues to grow every day with numerous solutions. However, in the blockchain wave that’s currently on, it’s essential to not forget the major aims of blockchain in the first place. Tacen is retracing the steps and making blockchain solutions to represent the actual mission statement of the industry. Tacen is creating an infrastructure that leverages the DFINITY’s Internet Computer [IC] to democratize transactions in the trading community. That way, everyone has a stake.
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