In brief

  • The Decrypt Daily featured five executives from decentralized exchanges.
  • The guests discussed the potential future of DEXes as well as expanding use cases.
  • Centralized exchanges BitMEX and KuCoin have faced major troubles of late.

It has been a rough couple of weeks for centralized exchanges. This week, the United States Commodity Futures Trading Commission filed money-laundering and criminal charges against BitMEX and its founders, while the previous week, exchange KuCoin was drained of $280 million by hackers.

It’s no surprise that some of the social media sentiment shifted towards the benefits of decentralized finance (or DeFi) and decentralized exchanges (DEXes), even if decentralization doesn’t necessarily mean absolute immunity from legal troubles. Customers of decentralized exchange Uniswap, for instance, traded $1.028 billion on September 2, far higher than customers of Coinbase Pro, which traded $797.5 million within 24 hours.

Even so, what does the future of decentralized exchanges look like, and what are the long-term benefits over the traditional, centralized exchanges of the world like Coinbase and Binance? The Decrypt Daily podcast explored that topic in the latest episode, featuring several guests from across the DEX industry.

In the first part of the episode, IDEX CEO Alex Wearn and Komodo Platform CTO Kadan Stadelmann joined host Matthew Aaron to talk about what defines a DEX and what inspired their own moves in the space.

Wearn acknowledged that while the crypto faithful will tolerate clunky interfaces and complicated steps in managing their assets, there’s a potentially much broader mainstream group that still needs to be served. He suggested that a custodian integrated with a DEX could make things more approachable for the average user.

“You just want it to work; you want it to be safe and secure,” he explained of some users. “You don't want to deal with private keys. You probably just want the world's safest custodian who lets you log into their system by using your biometric authentication. We absolutely expect that many and maybe the majority of people will prefer to interact with crypto that way.”

On the back half of the episode, Aaron welcomed a trio of new guests: Tokenlon Head of Growth Lucas Huang, xBTC co-founder and CEO Mark Sgambelluri, and Loopring CMO Jay Zhou. The four discussed how DEXes can build trust with users by vetting listed projects and what DEX users’ priorities are, plus they shared thoughts on the long-term potential and use cases for decentralized exchanges.

“Looking at the landscape, I think [DEXes] definitely will become much larger and have more force. But I think it's kind of like looking at traditional finance, almost the credit union versus the big banks,” said Sgambelluri. “The Coinbases and the Crypto.coms of the world will exist, but decentralized exchanges are quickly taking all the features that these centralized exchanges have and making them better and more decentralized, and giving them to the people.”

Tune in to The Decrypt Daily for more perspective from all five guests about the past, present, and future potential of decentralized exchanges. Subscribe on iTunes and continue to be informed about the latest happenings in cryptocurrency, blockchain, and decentralized tech.