DEX Appeal

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Eric Turner - October 2, 2018

Decentralization is the “killer app” for crypto only to the extent it improves performance in some way vs. centralized alternatives. We all should know that by now.

But the deep divide in usability between decentralization applications and their legacy alternatives has driven a reversion to centralized services recently - even amongst the industry’s biggest boosters. Nowhere is this more apparent than in the exchange space.

Crypto exchanges are not an ideal place to keep your money. There’s even a meme for holding on exchanges: not your keys, not your coins.

The problem is simple: crypto exchanges hold user tokens in pooled wallets. This makes it easier to use these platforms, increases liquidity, and allows traders to quickly settle trades. But pooled wallets are also prime targets for hackers, and make the spoils of a successful hack extremely lucrative. Imagine a thief cracking a single safety deposit box, and being able to steal all of a bank’s assets at once.

This happens semi-regularly in crypto.