Decentralization as an idea in cryptocurrency is the most important driving factor. Unfortunately, as often happens, everything turns out to be completely different. We see that regulators are trying to centralize the cryptocurrency system and regulate every movement of funds.
It’s all the fault of centralized exchanges, which perfectly help regulators to cope with their work. Let’s take a look at just two pictures that will help clarify the whole situation.
We go to the CMС and look at the volume on Spot and the volume on DEX, we take only the top of the exchange, since even with this example everything will become clear.
On the spot, as we can see, the top 1 is a Binance from $15,820,653,864. An astronomical sum.
In DEX the first place is taken by Uniswap with $801,524,636
As we can see, the difference is enormous. The trading volume on the centralized exchange is 20 times more than on the most popular DEX. And this trend continues if we compare other exchanges.
What is the problem with DEX?
Firstly, it is difficult for new users. Yes, anyway, you need to learn how to use DEX. If everything is very simple with CEX, then everything is not so obvious. You need to install the extension, make a cryptocurrency deposit and only then make an exchange. And slippage, liquidity and other concepts are simply unknown to the novice user.
Secondly, crazy fees. On CEX, the exchange is so inconspicuous that you simply do not notice the fees, on DEX everything is different. To make an exchange, you need to pay huge fees.
Since the most popular DEX are based on the Ethereum blockchain, the fees can reach up to $ 150 in one direction. Can you imagine what it’s like for a beginner to see such an amount for an exchange?
How to solve it?
I am convinced that DEX will soon be able to compete with CEX, but not with the Ethereum blockchain. Its eternal problems with fees, low transaction speed and other problems do not allow DEX to develop normally in the world of cryptocurrencies.
Let’s look at a really working example of how to solve all the sores of Ethereum and make a perfect DEX with minimal fees and very fast transactions.
Ref.finance
This is DEX, which is based on the advanced Near Protocol. To make it clearer, let’s first understand what it is.
As stated on the official website:
NEAR is an open source platform that enables creators, communities, and markets to drive a more open, interconnected and consumer-empowered world.
And it’s true. This is a whole ecosystem that allows you to create daps on your own blockchain, with your own EVM and cross-chain compatibility with Ethereum.
In general, Near Protocol opposes itself to Ethereum. The development team managed to get rid of all the problems of the outdated cryptocurrency. Firstly, Near has a great ability to scale, secondly, the transaction speed is hundreds of times faster than ETH, and thirdly, the transaction cost is so low that it can not affect your final balance in any way.
Also, the Near Protocol is great for novice developers who can’t afford $ 300 for a deployment and a contract call. By the way, I talked about this in the last article. I advise you to read it.
Ref.finance is created on the Near blockchain, so we get all the advantages of a reliable protocol in the new DEX.
- There are no huge fees;
- No network delays;
- No bots;
- No scammers;
Let’s do a little review on Ref.finance.
The main page greets us with the familiar interface for DEX.
To start the exchange, you need to connect your wallet Near. You can create it here:
After creating the wallet, we connect it to the Ref.finance
After connecting, go to the Deposit tab and make it. The thing is that the exchanges take place in wrapped tokens nDai, nUsdt, nUni and so on. These are exactly the same coins, just wrapped in the Near blockchain.
The same thing happens with NEAR. In fact, a similar principle is inherent in any DEX.
Then you can make exchanges.
Let’s make an exchange and see how long it will take and what fees I will pay.
The exchange took 47 seconds and I paid a fees of 0.0084 NEAR. WHAT? So small? Yes, very small and very fast. Lol. Let’s make a reverse transaction so that we can make sure together that the fees is very small.
I made an exchange in both directions, and I spent $0.008902 (~$0.019)
Now let’s take a look at the Uniswap exchange.
As we can see, the optimal exchange will cost $ 11.4 in one direction. 22.8 if I make a purchase/sale. Lol. If you have only $ 1000, how can it be profitable?
Therefore, we do not wait, but simply transfer Ethereum to NEAR using the Rainbow Bridge.
Simply select an ERC20 token or a wrapped Ethereum and move them to the NEAR blockchain. Yes, just like that! You can do this through a centralized exchange, but using Rainbow Bridge is faster.
That’s all, after that you will be able to use your coins in the Near ecosystem.
Conclusion
As I said above, at the moment DEX have problems. But they need to be solved with the help of such proposals as Ref.finance. Of course, there were some disadvantages.
Due to the fact that the project is relatively new, some users notice insufficient liquidity on Swap’s.
But all this is solved by attracting new liquidity providers, and I am sure they will.
Also, among the disadvantages, I would note the lack of price change charts, but the team should fix this. I am convinced that visibility is the best thing in DEX.
Perhaps developers should look in the direction of Dextools and how it is implemented there. In any case, Ref.finance has a lot to grow, but fundamentally low fees and high exchange speed solve most of the problems of modern DEX.
