Ethereum ERC-20 exchange protocol 0x is aggregating liquidity from Kyber, Uniswap, Oasis, and other decentralized exchanges to improve asset pricing and reduce slippage.
0x introduced a new set of open-source tools that aggregates on and off-chain DEX liquidity. By combining order books from the most popular decentralized exchanges, the tool helps mitigate issues of low-volume, which is especially problematic among decentralized exchanges.
The low volume is evident when comparing between decentralized and centralized exchanges. The three DEXes facilitating the most trading volume — Kyber, Uniswap, and Oasis — posted just $6.7 million in 24-hour trading volume, according to DEXWatch. For comparison, Binance posted over $1.7 billion in volume over the same period.
Nevertheless, the DEX segment may prove vital to the crypto ecosystem. If anonymity and censorship resistance are to be furthered on cryptocurrencies like Bitcoin and Ethereum, then decentralized alternatives to the exchanges that currently dominate are necessary.
Exchanges like Binance, Coinbase, and Bitfinex are vulnerable to government regulations and hacks, and are often required to provide identifying information and tax-related trading records to government agencies.
Tools, like the one from 0x, will help further grow the segment and aid with price discovery while encouraging higher trading volumes across decentralized exchanges.
24-hour trading volume between all decentralized exchanges totaled $8.6 million — up 95% from $4.4 million this time last year.
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