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Would there be much benefit? Hacks happen because of two reasons: 1. Bugs 2. Social engineering In a decentralised exchange you increase your vulnerability to
by igorkraw 5y ago
Would there be much benefit? Hacks happen because of two reasons:
1. Bugs
2. Social engineering
In a decentralised exchange you increase your vulnerability to 1 trying to get rid of 2 on the exchange side, and I'm unsure you can offer the features that the bulk of traders want on a decentralised exchange. Actually, I'm sure (enough to bet 50 $ on it if there is a way to properly specify it) that the most important thing cannot be offered by decentralised exchanges: cashing out to pay your taxes in fiat.
- Acrobatic_Road 5y agoOn a decentralized exchange, users custody their own funds. So if a user gets hacked, it's not on the exchange. The only exception is liquidity providers, who give money to a contract.
- igorkraw 5y agoYeah, but what if the contract implementing the decentralised exchange has a bug?
- Acrobatic_Road 5y agoWell, then any LP funds in the contract are in jeopardy, as are any transfers to the contract. That's a lot less painful than all users of the exchange getting robbed. So the theoretical "bug bounty" is way lower on a decentralized exchange. Decentralized exchanges have a smaller attack surface than centralized exchanges, and be publicly & professionally audited. That's why they don't usually get hacked.