A Hybrid Approach: More Liquidity for Crypto
One of the main reasons that a mainstream usage of cryptocurrency is surrounded with scepticism is an unstable nature of digital assets that are not backed up by anything valuable. The volatility of the market corresponds with its liquidity. Therefore, it makes liquidity one of the main challenges to overcome, other challenges being security and efficiency.
When we start talking about crypto exchanges, whether they are decentralized, centralized or hybrid, we need to focus on what problems they can solve. Centralized exchanges are efficient. People, who forget their passwords in the five-minute span after logging out from a website, find comfort in the knowledge that even if you lose your private key, your account can still be restored. Although CEXs are easier to hack due to having one point of accumulated funds, the recent example of Bancor shows us that even having distributed access points does not make the exchange incorruptible.
So, let’s go back to liquidity. Crypto liquidity will exist when cryptocurrencies can be safely and easily converted to fiat and vice versa. For a crypto exchange to sustain high liquidity, it needs to have a big trading volume. The more people trade and use your crypto exchange, the higher the volume will be. To attract the users, a crypto exchange needs to be resilient, reliable and safe.
Combining DEX and CEX will result in a secure and efficient exchange. Such an exchange will be able to host a trade of various and large amounts of cryptocurrency securely, and thus it will have high liquidity.
A hybrid structure will give rise to a sustainable, auditable and reliable crypto trading platform, like Ternion. It will attract brokers and investors who want ease and safety of transactions with low spreads, low commission fees and margin trading. Ternion is a hybrid exchange that is licensed and allows fiat-to-crypto trading, thus making it a reliable provider of high liquidity.
Efficiency and high performance of centralized exchanges combined with transparency and security of decentralization give rise to maximum liquidity. Hybrid exchanges will become more prevalent in the industry — where there is demand, there is supply. Who will it attract? Institutional players, brokers, traditional investors, those who want to enjoy the freedom of decentralization and yet to feel a firm traditional foundation beneath.
Read more about Ternion and its ground-breaking hybrid exchange here: Ternion.io
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