In recent events with the centralized exchange such as the WazirX, it has become emphatically clear why one ought to hold their coins.
This incident has raised the debate, which comes with using CeX and DEX since the crypto community has to evaluate the pros and cons of both.
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The WazirX Incident
- Event: WazirX was hacked recently, which resulted in loss of over $230million in crypto assets from the platform. Prior to the attack, the crypto exchange, which calls itself India’s largest by volume, said it held around $500 million in digital assets.
- Impact: Some user were quite dramatic in their messages, saying they’ve been robbed and others were just reminded of the fact they have their funds on CEXs where they do not hold the private keys.
Relief Airdrop for WazirX Users
- Initiative by DeGate: In the process of handling this problem, DeGate launched Relief Airdrop to enable WazirX users to be compensated, depicting the organization’s concern of the users’ well-being.
- Objective: Give financial relief and an orientation towards its decentralized trading portal to the users.
Comparing CEX and DEX
Centralized Exchanges (CEX)
Pros
- User-Friendly: Intuitive interfaces and easy navigation.
- Customer Support: Assistance available for account recovery and issues.
- High Liquidity: Fast trade execution due to large trading volumes in crypto coins.
- Integrated Services: A wide range of services in one platform for accessibility and ease of use.
Cons
- Custody Risks: Users do not hold private keys, making their funds vulnerable.
- Regulatory Risks: Subject to government regulations and actions according to different countries.
- Higher Fees: Often higher transaction fees as compared to DEXs.
Decentralized Exchanges (DEX)
Pros
- Self-Custody: Users maintain the control of their private keys and funds.
- Privacy: No personal information required, preserving anonymity.
- Accessibility: Easier access to a wide variety of tokens and more supported crypto pairs.
Cons
- Complexity: Higher learning curve for new users.
- Lower Liquidity: Often less liquidity compared to CEXs, leading to potential slippage in trading.
- Less Customer Support: Compared to Cex, less support from the exchange team.
Also Read, 10 Best Decentralized Exchanges (DEX) to Trade Crypto
DeGate: Bridging the Gap
Enter, DeGate an on-chain order book DEX that combines the benefits of both CEXs and DEXs. It offers a secure, efficient, and user-friendly platform for trading.
It provides the easy-to-use interface and high trade volume, which is specific to CEXs and, at the same time, aspects of anonymity and users’ control typical for DEXs. Through the implementation of an Order Book in the chain, DeGate offers the users better control over their assets and safer trade opportunities.
Thus, the proposed concept combines the best features of both decentralized and centralized finance to guarantee users would benefit from the former without losing the usability observed in the latter.
Working Mechanism
- On-Chain Order Book: Allows for precise control over trades, similar to traditional financial markets.
- Layer 2 Integration: Uses zk-Rollups on Ethereum Layer 2 to reduce gas fees and increase transaction throughput.
- Security: Emphasizes self-custody, ensuring users retain control of their assets.
Supported Currencies
- Cryptocurrencies: Cryptocurrencies: Supports major assets like WBTC, ETH, and various ERC-20 tokens. Supports multi-chain assets like SOL, JUP, AVAX, BRETT, SUI and others too.
- Expanding List: Continually adding new tokens to enhance trading options.
Fees and Rates
- Trading Fees: Makers trade FREE. Takers 0.01% – 0.05%. Low fees due to Layer 2 integration, which are significantly lower than on-chain fees.
- Gas Fees: Reduced thanks to zk-Rollups technology.
- Incentives: Rewards for liquidity providers and high-volume traders.
Comparison Table: CEX vs. DEX
| Feature | CEX | DEX |
|---|---|---|
| User Experience | User-friendly, easy navigation | Complex, requires technical knowledge |
| Custody | Exchange holds private keys | Users retain private keys |
| Privacy | Requires personal information | Maintains user anonymity |
| Liquidity | High liquidity, fast execution | Lower liquidity, potential slippage |
| Customer Support | Available | Not available |
| Fees | Higher transaction fees | Lower transaction fees |
Key Features of DeGate
- Limit Orders: Free to place and cancel any limit orders
- Grid Trading: Earn 50-100%++ on any trading pair. No trading fees. No gas fees.
- DCA: Create a DCA plan of your favourite token at zero cost.
Therefore, it is clear from the WazirX case that self-custody is the way to go concerning cryptocurrencies. Being convenient and liquid, CEXs present major disadvantages in the form of the inability to bear full control of the funds.
DEXs are more secure and have higher privacy than centralised exchanges but they are generally complicated and illiquid. Due to the ideal integration of these two elements, DeGate can be considered as a rather successful platform for a secure and fast trading in the context of the decentralized financial system.
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