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Polkadex has created a fully decentralized order book that can match major exchanges in terms of speed, and also ensures that the blockchain is engaged at the optimum level for trading speed.
There is very little doubt that decentralized peer-to-peer (P2P) trading is a better solution for any kind of trading, crypto included. Polkadex is working to make a great idea work for the people that matter. When crypto was introduced, the idea was to create decentralized solutions for a digital world. From that came the desire to make profits from a volatile asset, which isn’t at all what Satoshi Nakamoto had in mind when Bitcoin was launched.
People want money, to whatever end that it may help them. Centralized exchanges grew to fill the demand for crypto trading, and this isn’t ideal for crypto holders. Polkadex understands that crypto holders want to have sovereign assets and that centralized exchanges aren’t a part of that picture.
When a crypto holder uses a centralized exchange, they have to cough up their private keys, and take that exchange on as a counterparty. Needless to say, this is a terrible situation for crypto users, and there have been numerous problems with centralized exchanges over the years. There are better options out there, and it is time to make changes happen.
Polkadex Makes It Possible
The idea of decentralized P2P trading is clearly better for traders and investors, but on a practical level, it just hasn’t been able to compete with centralized exchanges. There are a few reasons for this. Centralized exchanges tend to offer better prices, and also much deeper liquidity pools. Decentralized networks also tend to be slower, as they have to interact directly with a blockchain.
Polkadex has taken all these limitations into account, and created a fully decentralized order book that can match major exchanges in terms of speed, and also ensures that the blockchain is engaged at the optimum level for trading speed.
In fact, Polkadex’s platform has been able to achieve a speed of 200 trades per second, as opposed to Binance‘s average of 153 per second. In simple terms, this means that decentralized P2P trading has a shot at challenging centralized exchanges, and making an impact on how cryptos are traded globally.
The Point Was Decentralization
It is becoming easier to forget that the point of Bitcoin and blockchain was to create decentralized solutions for humanity. Centralized structures are failing, economies are being heavily manipulated, and the vast majority of people don’t even understand what money is.
When an economy breaks apart, people look for solutions. In a post-gold standard world, people tended to hold money from a ‘better’ economy, like the USA or Germany, but that has become an issue. These economies are also shattered, and central banks are plugging holes with trillions in fresh currency.
Moving cryptos through centralized exchanges creates some big problems. For one, they are targets for hackers and government action, which is what is happening at OKEx at the moment. These exchanges are also liquidity centers, so when they go offline, the impact on crypto prices could be severe.
According to Bloomberg, “OKEx said an unidentified staffer responsible for users’ private keys – accounts where coins are stored – has been “out of touch” while cooperating with a police investigation, the Malta-based exchange said in an Oct. 16 release. The exchange emphasized that everyone’s deposits are safe.”
In the world of centralized exchanges, users have to give up total control over their assets – which isn’t the way Bitcoin was supposed to work.
Decentralized P2P Trading Is the Solution
Polkadex has done a good job of creating a platform that embraces the ideas of decentralization, while being able to compete with centralized exchanges. It created a platform that decentralized all the blockchain writes, so that the trades can be independently verified. While the writes are decentralized, the reads are centralized, which is one of the ways that the platform is able to maintain its speed.
Being able to trade on a Decentralized P2P platform that can match the speed of a centralized exchange is great for existing traders, but the impact that zero counterparty risk trades may have is actually much larger.
More and more institutional investors are looking at the crypto world, but the companies that exist in the sector probably aren’t in-line with the counterparty regulations that professional money managers have to follow. While there is a centralized solution to this, decentralized P2P markets are a far better option for many reasons.
Making Money in the Markets
Polkadex’s platform incentives market makers with 0.1% of the trading fee, which means that crypto holders could set up trading operations that make money from the market-making, no matter which direction they are going. This position is reserved for massive banks and prop trading desks in the established markets, and there is no way a small or medium-sized company could compete, or even qualify as a market maker.
With interest rates in the fiat financial system pegged near zero, companies will be looking for new ways to earn a return on reserves. Market making on a decentralized P2P trading platform would make sense, and if set up correctly, it would offer low risk returns on a daily basis.
The simple fact is that decentralized P2P trading makes sense for so many reasons, especially if it can compete in terms of speed and price. It appears that Polkadex has created a platform that makes it possible, and could be the next big thing to hit crypto trading.
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Founder and editor at BTC PEERS. Andrey writes about financial experiments, DeFi, cryptocurrency, and blockchain.
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