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The essence of cryptocurrency revolves around decentralization. Recent rises and discussions relating to decentralized exchanges have helped to bring many of the grounding foundations back into focus. They draw so many people to the industry in the first place.
DYDX’s airdrop and the uproar about Hyperliquid’s decision to recently extend its points campaign have injected new capital into crypto. As more money flows in through institutions and retail, DEXs become a more significant part of the conversation. However, what are some other factors causing such a surge in usage?
Defining DEXs & Decentralization
Decentralized exchanges allow traders to connect their wallets directly to the site. It is the main difference from their centralized counterparts, often overseen by a company, corporation, or controlling entity. It is a reasonably generic oversight and definition. However, some in the industry will draw their own conclusions and lines between what is decentralized and what is not.
XRP is a good example, given that the token’s controlling supply is held in the wallets of Ripple’s two CEOs. Conversely, Bitcoin’s controlling supply is in an anonymous set of wallets that hasn’t been touched in over a decade.
Some traders and analysts argue that these assets could be centralized or decentralized. While we’re sure you have your own opinion on it, the point is that the term itself can be ambiguous. However, any such discussion is healthy for a space that continues to see increasing innovation and capital inflows. DEXs are becoming a growing, positive element of the industry that is sticking to the original decentralized roots.
Bull Run Narratives
Each bull run has its own narrative. While we aren’t amid the bull run we saw in 2017 and 2021, it does feel like something is brewing. Just recently, Binance’s native token, BNB, silently rose to its highest-ever price.
Although it was the bridge token of choice for many of the 2021 memecoins, its current highest price is intriguing. Solana is also holding the distinction of the memecoin global marketplace.
The upcoming bull run will likely revolve around several narratives, such as modular tokens and projects, AI, and casino gaming. While this isn’t a guaranteed list, many commentators believe these three will bring in the big money and propel Bitcoin, other cryptocurrencies, and decentralized exchanges toward their golden years.
Placing a wager with crypto might not be the first use case that springs to mind. However, as more platforms highlight the power of decentralization, bypassing the fees and red tape you can often run into with traditional gambling platforms, betting with Bitcoin has become more attractive for many people. More people have started using decentralized exchanges and wrapping their heads around peer-to-peer withdrawal and deposit methods. Gambling platforms are likely to become the unintended beneficiaries of this increase in betting activity.
Positives Of Decentralized Exchanges (DEXs)
Understanding how decentralized exchanges work is crucial before you make any deposit or trade via their platform. Cryptos drill into the essence of crypto and see billions of dollars worth of volume. You must also know how they work and don’t invest money you can’t afford to lose.
All deposits and withdrawals are registered and verified on the blockchain – so in the event of any issues with your crypto payments, you can find the transaction hash and raise it with the necessary party – it is all publicly viewable. It is one of the key elements of DEXs, and they all have teams scattered across a range of social media channels, such as Telegram and Discord, who you can contact if you need to raise any queries.
Some of the top DEXs in the space are generating more volume than centralized exchanges. By focusing on the things that matter most to traders and investors, such as lower fees and quicker transaction times, decentralized exchanges are positioning themselves in a unique and convenient space within the cryptocurrency market.
Summary
The rise of DEXs highlights the innovation and ingenuity that exists organically within the global crypto space. The emergence of highly innovative DEX platforms such as 1inch, DYDX, and Hyperliquid has led to a surge in users, but the increase in retail users will excite those behind the designs of these platforms the most.
Not only are they generating impressive volume and providing a facility for those using prominent altcoins like Solana, but users are also witnessing the benefits and smooth transaction times firsthand.
Given the growing anticipation that a bull run and new BTC highs are imminent, many traders will look for alternate, cheaper ways to trade and invest in their favorite cryptocurrency projects. It is a corner of the market where DEXs could thrive, especially if the significant wave of anticipated retail and institutional traders comes to fruition.
Disclaimer: The views and opinions stated by the author or any people named in this article are for informational purposes only. They do not establish financial, investment, or any other advice. Investing in or trading crypto or stock comes with a risk of financial loss.
Sam Chess is an utterly focused person looking for the minute details having potential to make a big difference. He is a writer and proofreader with a zeal to understand the cryptocurrency market. Additionally, he can be found trying to figure out the biggest mystery in the industry, Satoshi Nakamoto.
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