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The top decentralized exchange, Uniswap, has overtaken the top centralized exhanges in liquidity depth for several major trading pairs: https://uniswap.org/blo

The top decentralized exchange, Uniswap, has overtaken the top centralized exhanges in liquidity depth for several major trading pairs: https://uniswap.org/blog/uniswap-v3-dominance https://uniswap.org/blog/uniswap-v3-dominance So there is a world where centralized exchanges have far less relevance than they do today.

Forgeties79 4y ago
I just don't see it going away. Services like Coinbase have done more for adoption than any crypto-evangelists on message boards ever have if we're being honest with ourselves. People need it to feel familiar, and these pseudo-banks/stock exchange platforms feel close enough to the "real thing" that people are making the jump. I mean the fact that over a decade later and wallets are still this incredibly high-friction experience for users says a lot. Just having an easy place where you go "input debit card, get crypto," makes all the difference - and that's a service large exchanges have covered, thus locking people into their platform(s). Edit: Also, Uniswap...ehhhh. Not a great example for your point.
HaZeust 4y ago
Uniswap is *so* easy to slander to the ground from centralized exchanges if push came to shove. It's the primary tool for exit scams, there's barely any qualifications or criteria to mint a coin, ICOs simply don't matter anymore - all are particularly easy points to hit if you're competitors fall short on handling them. And that's just mentioning the pragmatic on how Uniswap neglects fixing the BAD side of crypto, it doesn't even go over how Uniswap delivers only niche features on the good side of crypto - and doesn't do things like foster easier crypto buying/selling for mass adoption from the average person. Please, come back to me when Uniswap's market cap isn't 1/3 of Coinbase's.
tromp 4y ago
Correct me if I'm wrong, but Uniswap doesn't allow people to buy crypto currency with fiat. It only exchanges between various crypto currencies. There will always be a need for fiat-crypto exchanges like Coinbase, that are centralized by necessity.
- SilasX 4y ago
  Sure, but that role could be truncated to "convert between financial system currencies and stablecoins" while DeFi handles all the other work of an exchange, displacing centralized exchanges. And even that role might be obviated once enough people transact directly in the stablecoins. (Not necessarily saying it's likely, just delineating the hypothetical word where DeFi has maximally taken over.)
  - ETH_start 4y ago
    >>Sure, but that role could be truncated to "convert between financial system currencies and stablecoins" Coinbase has already started doing that, by abolishing the distinction between the stablecoin, USDC, and its bank deposit USD. It's entirely plausible that other financial institutions, beyond commpanies like Coinbase which are heavily involvd in the cryptocurrency market, begin doing that as stablecoins gain wider credibility and adoption.
    - SilasX 4y ago
      Huh? I was talking about a world where they only concert between those assets. If coinbase is additionally doing that, then that’s not what I’m describing. And it’s it’s not even the service I was referring to (which requires that the asset classes be kept distinct). I swear, something about that comment just set people off, when it should be uncontroversial with the caveats I gave.
      - ETH_start 4y ago
        I was agreeing with you. I was citing an example of a financial institution providing that particular utility, to support the idea you presented, that it's plausible that one day financial institutions could be relegated to only providing that utility. Your point was well supported, so I don't see the reason why it got downvoted. >>which requires that the asset classes be kept distinct Yes it's not exactly what you described, but functionally speaking, it is quite similar as it enables on-chain and off-chain fiat to be converted one for one.
lottin 4y ago
Is it me or "decentralised" almost always means "crippled"? The critical function that exchanges have is to allow people to buy and sell tokens. Decentralised exchanges can't do that. They only allow trading a token for another token.
- solveit 4y ago
  "Decentralized" doesn't mean crippled. "On-chain" does. At some point, you need to interact with the off-chain world (say, when you want US dollars and not tokenized US dollars), and that path to the physical world becomes a point of failure that can be controlled by mundane means such as uniformed people with guns. The crypto-utopian solution is to move everything on-chain. The pragmatist solution is centralized exchanges that more-or-less plays by the rules of wider society and is allowed by society to move stuff in and out of the blockchain.
- ETH_start 4y ago
  The tokens being traded on DEXes can be stablecoins. In a world where most usage of fiat is in the form of using stablecoins, or one where most financial institutions provide conversion of off-chain fiat to/from stablecoin fiat, most trading can happen on DEXes.
  - lottin 4y ago
    That's right, in a hypothetical world where this limitation might not matter, it might not matter.
    - ETH_start 4y ago
      The point is that that hypothetical world becoming reality is plausible.
- dcolkitt 4y ago
  But we have stablecoins, like USDC, to act as on-chain dollars. The point is in a world of very robust decentralized exchanges, it's easy to buy tokens with dollars (or vice versa), by sending dollars from your bank account to Circle, who will send USDC to your wallet, which will then buy the token of your choice from a decentralized exchange. In this context Circle is still a centralized party that's necessary to interact with the off-chain banking world. But Circle has much less room for chicanery than a traditional centralized exchange. There's no opportunity to front-run, insider trade, liquidate your customers or anything else that OP brought up in the context of centralized exchanges, because all Circle is doing is filling the very simple task of converting 1.00 USD to 1.00 USDC and nothing else.

Forgeties79 4y ago

I just don't see it going away. Services like Coinbase have done more for adoption than any crypto-evangelists on message boards ever have if we're being honest with ourselves. People need it to feel familiar, and these pseudo-banks/stock exchange platforms feel close enough to the "real thing" that people are making the jump. I mean the fact that over a decade later and wallets are still this incredibly high-friction experience for users says a lot. Just having an easy place where you go "input debit card, get crypto," makes all the difference - and that's a service large exchanges have covered, thus locking people into their platform(s). Edit: Also, Uniswap...ehhhh. Not a great example for your point.

HaZeust 4y ago

Uniswap is *so* easy to slander to the ground from centralized exchanges if push came to shove. It's the primary tool for exit scams, there's barely any qualifications or criteria to mint a coin, ICOs simply don't matter anymore - all are particularly easy points to hit if you're competitors fall short on handling them. And that's just mentioning the pragmatic on how Uniswap neglects fixing the BAD side of crypto, it doesn't even go over how Uniswap delivers only niche features on the good side of crypto - and doesn't do things like foster easier crypto buying/selling for mass adoption from the average person. Please, come back to me when Uniswap's market cap isn't 1/3 of Coinbase's.

tromp 4y ago

Correct me if I'm wrong, but Uniswap doesn't allow people to buy crypto currency with fiat. It only exchanges between various crypto currencies. There will always be a need for fiat-crypto exchanges like Coinbase, that are centralized by necessity.

SilasX 4y ago
Sure, but that role could be truncated to "convert between financial system currencies and stablecoins" while DeFi handles all the other work of an exchange, displacing centralized exchanges. And even that role might be obviated once enough people transact directly in the stablecoins. (Not necessarily saying it's likely, just delineating the hypothetical word where DeFi has maximally taken over.)
- ETH_start 4y ago
  >>Sure, but that role could be truncated to "convert between financial system currencies and stablecoins" Coinbase has already started doing that, by abolishing the distinction between the stablecoin, USDC, and its bank deposit USD. It's entirely plausible that other financial institutions, beyond commpanies like Coinbase which are heavily involvd in the cryptocurrency market, begin doing that as stablecoins gain wider credibility and adoption.
  - SilasX 4y ago
    Huh? I was talking about a world where they only concert between those assets. If coinbase is additionally doing that, then that’s not what I’m describing. And it’s it’s not even the service I was referring to (which requires that the asset classes be kept distinct). I swear, something about that comment just set people off, when it should be uncontroversial with the caveats I gave.
    - ETH_start 4y ago
      I was agreeing with you. I was citing an example of a financial institution providing that particular utility, to support the idea you presented, that it's plausible that one day financial institutions could be relegated to only providing that utility. Your point was well supported, so I don't see the reason why it got downvoted. >>which requires that the asset classes be kept distinct Yes it's not exactly what you described, but functionally speaking, it is quite similar as it enables on-chain and off-chain fiat to be converted one for one.

lottin 4y ago

Is it me or "decentralised" almost always means "crippled"? The critical function that exchanges have is to allow people to buy and sell tokens. Decentralised exchanges can't do that. They only allow trading a token for another token.

solveit 4y ago
"Decentralized" doesn't mean crippled. "On-chain" does. At some point, you need to interact with the off-chain world (say, when you want US dollars and not tokenized US dollars), and that path to the physical world becomes a point of failure that can be controlled by mundane means such as uniformed people with guns. The crypto-utopian solution is to move everything on-chain. The pragmatist solution is centralized exchanges that more-or-less plays by the rules of wider society and is allowed by society to move stuff in and out of the blockchain.
ETH_start 4y ago
The tokens being traded on DEXes can be stablecoins. In a world where most usage of fiat is in the form of using stablecoins, or one where most financial institutions provide conversion of off-chain fiat to/from stablecoin fiat, most trading can happen on DEXes.
- lottin 4y ago
  That's right, in a hypothetical world where this limitation might not matter, it might not matter.
  - ETH_start 4y ago
    The point is that that hypothetical world becoming reality is plausible.
dcolkitt 4y ago
But we have stablecoins, like USDC, to act as on-chain dollars. The point is in a world of very robust decentralized exchanges, it's easy to buy tokens with dollars (or vice versa), by sending dollars from your bank account to Circle, who will send USDC to your wallet, which will then buy the token of your choice from a decentralized exchange. In this context Circle is still a centralized party that's necessary to interact with the off-chain banking world. But Circle has much less room for chicanery than a traditional centralized exchange. There's no opportunity to front-run, insider trade, liquidate your customers or anything else that OP brought up in the context of centralized exchanges, because all Circle is doing is filling the very simple task of converting 1.00 USD to 1.00 USDC and nothing else.