Thoughts on Decentralized Exchanges and Real World Usage of their own Tokens

One of first things you learn when diving down the crypto rabbit-hole is how to navigate exchanges, as they are instrumental to the movement of cryptocurrencies.

Jan Wozniak
Sep 18, 2018 · 5 min read

Currently, more than 99% of crypto’s transactional volume goes through centralized exchanges, but I expect this dominance to gradually fall. Over the last year or so, there has been more and more discussion of the pros and cons of decentralized exchanges. [Excellent Primers: 1, 2, 3].

Image for post
Image for post
Thanks to Altcoin.io for this handy infographic!

The blockchain revolution was founded on principles of decentralization, and yet we find ourselves in a curious situation where certain entities control the scene.

In the face of this, what advantages can decentralized exchanges offer?

  • No single point of failure — data and funds are more secure as ownership is in the hands of the users
  • No single point of control — not restricted by law, KYC/AML procedures

DEXs are also relatively simple to get up and running, and it’s intriguing to watch a steady stream of new projects popping up (see here for a comprehensive list: https://github.com/distribuyed/index). Even established players like Binance and Bitfinex are playing around with the idea and looking to create decentralized versions of their platforms.

Another feature of DEXs I want to explore in more detail is that they are often underpinned by a token.

Let’s look at a few different DEX players who have tokens that are being used in the wild.

0x — an open and non-rent seeking protocol that facilitates trustless, low friction exchange of Ethereum-based assets. Developers can use 0x as a platform to build exchange applications on top of. For end users, 0x will be the infrastructure of a wide variety of user-facing applications.

Bancor — a decentralized liquidity network that allows you to hold any Ethereum token and convert it to any other token in the network, with no counter party, at an automatically calculated price, using a simple web wallet.

Kyber Network — provides rich payment APIs and a new contract wallet that allow anyone to seamlessly receive payments from any token. Users can also mitigate the risks of price fluctuations in the cryptocurrency world with derivative trading.

Loopring — a protocol and decentralized automated execution system that trades across the crypto-token exchanges, shielding users from counterparty risk and reducing the cost of trading.

Airswap — a decentralized token exchange based on the Swap protocol, which provides a decentralized trading solution based on a peer-to-peer design.

Blockport — a hybrid-decentralized exchange with a strong focus on user-friendliness, social trading features and building a knowledge sharing community.

Everyone’s fixated on price, so we’ll get MARKETCAP out of the way first.

Click here for INTERACTIVE VERSION

Image for post
Image for post

NUMBER OF HOLDERS.

Image for post
Image for post

DISTRIBUTION OF TOP ADDRESSES.

Click here for INTERACTIVE VERSION

Image for post
Image for post

DAILY TOKEN ACTIVITY.

Click here for INTERACTIVE VERSION

Image for post
Image for post
Image for post
Image for post

Final Thoughts

_______________________________________________________

All onchain data taken from Trivial.co — a token catalog/block explorer i’m building that provides investors with insights into more than just price, and let’s you keep up-to-date with your favourite projects.

Trivial.co

Ethereum Blockchain Explorer

Medium is an open platform where 170 million readers come to find insightful and dynamic thinking. Here, expert and undiscovered voices alike dive into the heart of any topic and bring new ideas to the surface. Learn more

Follow the writers, publications, and topics that matter to you, and you’ll see them on your homepage and in your inbox. Explore

If you have a story to tell, knowledge to share, or a perspective to offer — welcome home. It’s easy and free to post your thinking on any topic. Write on Medium

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store