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They lose the most important property of being trustless and miss out on all the composability that comes along with being on the same chain. It can be done b

They lose the most important property of being trustless and miss out on all the composability that comes along with being on the same chain. It can be done but not in a better way, a centralized equvilent is strictly worse than these.

SilasX 4y ago
Okay: So it comes down to whether you think decentralization is some epically awesome feature to have in a financial platform? Great, but that wasn't your original claim, and it wasn't the part I found dubious. The part I replied to, rather, was the claim that you can't build a better Uniswap et al, for any reasonable definition of "better", and that nobody is able to propose such a mechanism despite their efforts[1], and that finding the centralization tradeoff good makes you unimaginative. Even as an avid cryptocurrency/smartcontract enthusiast, I consider this unjustified hyperbole. Decentralization has costs and benefits. You gain resilience and verifiability, but at the cost of having to pay the overhead to ensure the decentralization. So you can absolutely have a centralized version of Uniswap et al. It would look exactly like Uniswap does today, but cheaper, and without (some of) the guarantees against corruption and verifiability. You dislike that tradeoff. That's fair! But that doesn't justify the conclusion that "no one can imagine a centralized Uniswap". [1] Before you call strawman, please look at your comment: https://news.ycombinator.com/item?id=31160906 https://news.ycombinator.com/item?id=31160906
- TimJRobinson 4y ago
  That's fair. Uniswap was a poor choice because people do use centralized exchanges, though I don't know of a single one that allows you to earn returns by providing liquidity. There are far more complex DeFi products that are much harder to replicate but people here wouldn't understand them. My argument is merely a counter to his "databases are faster therefore they are better" when in reality decentralized finance is better on almost every dimension. Take Uniswap on polygon: - Trades complete in < 2s - Trades cost less than 1c - There is no external party risk, you are in complete control of your funds. - You can provide liquidity for a return - playing the part of the house. - Any app can integrate without permission and all API uptime, permissions, latency, etc is handled by the Blockchain. - Many hundreds of apps have already integrated with it and you can use them alongside it for a better UI, or multiple trades, or routing through many exchanges. The advantages you get of centralization: - a small increase in speed - save 1c on every trade For that you take on custody risk, they could run off with your funds or they could be hacked. You don't have the chance to earn income, you get no or few integrations, you get no choice of UI, you can't fork it if the company turns evil, and you can be banned or restricted at any time. It's night and day difference in the experience. I'm going to write an article on DeFi composability because it's super underrated.
  - SilasX 4y ago
    >Uniswap was a poor choice ... There are far more complex DeFi products that are much harder to replicate but people here wouldn't understand them. The choice of protocol here doesn't matter. There's nothing difficult about any of the other ones. They're just code that executes on the EVM[1]; anyone can pick up that same code and process transactions on a centralized database instead. Doing so does not introduce any inherent implementation difficulty, only the normal tradeoffs related to centralization. >My argument is merely a counter to his "databases are faster therefore they are better" And on that point, you're correct -- you can't simply say that centralized databases are better, since they give up the (very real) benefits of decentralization, and I'm glad you raised that point. I'm only objecting to the more dubious bits about how you "can't" do uniswap on a centralized DB. >when in reality decentralized finance is better on almost every dimension. Take Uniswap on polygon: That's also not a fair comparison. Many cryptos show good figures merely because they haven't had to scale up to the volume of Ethereum L1. And Ethereum L1 is much worse on those dimensions. >I'm going to write an article on DeFi composability because it's super underrated. But you can have the composability with centralization, it just isn't currently offered. (Although if you imagine centralization as a continuum, then the Ethereum L2s are more in that direction.) [1] And code that has to severely economize on cycles executed because you have to pay for each one.

SilasX 4y ago

Okay: So it comes down to whether you think decentralization is some epically awesome feature to have in a financial platform? Great, but that wasn't your original claim, and it wasn't the part I found dubious. The part I replied to, rather, was the claim that you can't build a better Uniswap et al, for any reasonable definition of "better", and that nobody is able to propose such a mechanism despite their efforts[1], and that finding the centralization tradeoff good makes you unimaginative. Even as an avid cryptocurrency/smartcontract enthusiast, I consider this unjustified hyperbole. Decentralization has costs and benefits. You gain resilience and verifiability, but at the cost of having to pay the overhead to ensure the decentralization. So you can absolutely have a centralized version of Uniswap et al. It would look exactly like Uniswap does today, but cheaper, and without (some of) the guarantees against corruption and verifiability. You dislike that tradeoff. That's fair! But that doesn't justify the conclusion that "no one can imagine a centralized Uniswap". [1] Before you call strawman, please look at your comment: https://news.ycombinator.com/item?id=31160906 https://news.ycombinator.com/item?id=31160906

TimJRobinson 4y ago
That's fair. Uniswap was a poor choice because people do use centralized exchanges, though I don't know of a single one that allows you to earn returns by providing liquidity. There are far more complex DeFi products that are much harder to replicate but people here wouldn't understand them. My argument is merely a counter to his "databases are faster therefore they are better" when in reality decentralized finance is better on almost every dimension. Take Uniswap on polygon: - Trades complete in < 2s - Trades cost less than 1c - There is no external party risk, you are in complete control of your funds. - You can provide liquidity for a return - playing the part of the house. - Any app can integrate without permission and all API uptime, permissions, latency, etc is handled by the Blockchain. - Many hundreds of apps have already integrated with it and you can use them alongside it for a better UI, or multiple trades, or routing through many exchanges. The advantages you get of centralization: - a small increase in speed - save 1c on every trade For that you take on custody risk, they could run off with your funds or they could be hacked. You don't have the chance to earn income, you get no or few integrations, you get no choice of UI, you can't fork it if the company turns evil, and you can be banned or restricted at any time. It's night and day difference in the experience. I'm going to write an article on DeFi composability because it's super underrated.
- SilasX 4y ago
  >Uniswap was a poor choice ... There are far more complex DeFi products that are much harder to replicate but people here wouldn't understand them. The choice of protocol here doesn't matter. There's nothing difficult about any of the other ones. They're just code that executes on the EVM[1]; anyone can pick up that same code and process transactions on a centralized database instead. Doing so does not introduce any inherent implementation difficulty, only the normal tradeoffs related to centralization. >My argument is merely a counter to his "databases are faster therefore they are better" And on that point, you're correct -- you can't simply say that centralized databases are better, since they give up the (very real) benefits of decentralization, and I'm glad you raised that point. I'm only objecting to the more dubious bits about how you "can't" do uniswap on a centralized DB. >when in reality decentralized finance is better on almost every dimension. Take Uniswap on polygon: That's also not a fair comparison. Many cryptos show good figures merely because they haven't had to scale up to the volume of Ethereum L1. And Ethereum L1 is much worse on those dimensions. >I'm going to write an article on DeFi composability because it's super underrated. But you can have the composability with centralization, it just isn't currently offered. (Although if you imagine centralization as a continuum, then the Ethereum L2s are more in that direction.) [1] And code that has to severely economize on cycles executed because you have to pay for each one.