The technology of trading crypto assets has created millions of millionaires over the last decade. Currently, over 13,000 cryptocurrencies are listed on both centralized and decentralized exchanges. More importantly, the crypto market is a 24/7 ecosystem, giving traders the opportunity to make money all year round. However, it’s not as easy as it sounds. A significant number of people are losing their fortune in an attempt to trade digital assets.
So how do crypto traders have access to some of their life-changing investments? There are two main channels for trading cryptocurrencies. Centralized Exchange (CEX) and Decentralized Exchange (DEX). Both settings are designed to provide maximum usefulness to users, but there is growing interest in the latter following regulatory crackdowns and mismanagement of funds by CEX.
According to a recent report by The Block, DEX recorded over $ 1 trillion in transaction volume in 2021, an increase of 858% over the previous year. That said, this fast-growing crypto trading niche still faces a myriad of challenges. Most notably, DEX traders are often limited to a single blockchain environment. Disadvantages that often make it difficult to take advantage of the best deals between different DeFi protocols.
Should this really be the case? Some might argue that DeFi is an ongoing task, but it’s clear that innovators need to create solutions that fill the gap between DEX, regardless of the chain they operate on. Fortunately, some players seem to be finally listening to this call. A paradigm shift is currently being seen, with the DeFi project launching products on several blockchains and other players debuting interoperability solutions.
A sigh of relief
Currently, Uniswap (v3) is currently the leading DEX with a market share of 41.6%. However, this is only compatible with the Ethereum blockchain. This is a limitation that excludes most small DeFi traders given the high gas charges required to perform swaps. In addition, users can only trade ERC-20 compatible crypto tokens, excluding other potential digital assets present in the Layer 1 blockchain such as Solana and Avalanche.
What if there was a way for crypto traders to take advantage of more opportunities without switching blockchain environments? To this end, Sushiswap has integrated support for several blockchain ecosystems such as Avalanche, Polygon, Harmony and Fantom. Ideally, platform users can exchange various crypto tokens hosted in the ecosystem mentioned above through the Atomix DEX built-in wallet.
For those who prefer to trade on leverage, the Primex Liquidity Protocol is another DeFi trading ecosystem that allows you to trade multiple crypto assets on margin across different chains. This DEX-agnostic cross-margin DeFi trading platform runs on several DEXs such as CurveFinance, Sushiswap and Uniswap. Among other things, Primex has a credit bucket that allows users to enter under a secured margin position.
Cross-chain solutions play a fundamental role in adoption, as DeFi is set to continue its uptrend even after market conditions stabilize. The examples given in this article are some of the major innovations currently addressing this issue. Most crypto projects may take some time to come to fruition, but it’s easy that interoperability should be the way forward.
“Pure decentralization within individual blockchain networks is a top priority for many blockchain projects, but the ability to establish network interoperability across multiple blockchains decentralizes systems and the economy. Demonstrate a more advanced embodiment of the promise of blockchain technology. ”Recent attention blog By Gemini crypto exchange.
summary
The decentralized economy is gradually challenging the long-standing dominance of the traditional financial ecosystem. Given the proportion of both private and institutional investors allocating money to the DeFi market, it is likely that they will not witness a revolution in the next decade. An era when investors no longer have to go through a centralized broker to earn a living. Instead, the DeFi protocol replaces these intermediaries.
In that case, interoperability will undoubtedly be important in the future paradigm of decentralized financial markets. Investors are better off trading between different DEXs rather than being confined to one particular platform. As highlighted in this article, development is underway to make cross-chain trading a more seamless experience. It’s only a matter of time before DeFi natives enjoy the long-awaited freedom.
