{"id":239117,"date":"2021-04-30T10:21:00","date_gmt":"2021-04-30T07:21:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/we-all-know-the-issues-with-defi-but-what-are-the-answers\/"},"modified":"2021-04-30T10:21:00","modified_gmt":"2021-04-30T07:21:00","slug":"we-all-know-the-issues-with-defi-but-what-are-the-answers","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/we-all-know-the-issues-with-defi-but-what-are-the-answers\/","title":{"rendered":"# We all know the issues with DeFi \u2014 but what are the answers?"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a36ce09a2981\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a36ce09a2981\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/we-all-know-the-issues-with-defi-but-what-are-the-answers\/#%E2%80%98The_perfect_decentralized_exchange\" >\u2018The perfect decentralized exchange\u2019<\/a><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong># We all know the issues with DeFi \u2014 but what are the answers? <\/strong>&#8221;<\/p>\n<div class=\"post-content\" data-v-5a136f3a>\n<p dir=\"ltr\"><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.polkadex.trade\/\"><img loading=\"lazy\" decoding=\"async\" width=\"1480\" height=\"200\" alt=\"Polkadex\" src=\"https:\/\/s3.cointelegraph.com\/storage\/uploads\/view\/78b9fa68eb7eb6de1fb52ad2ed1900b3.jpg\" title=\"Polkadex\"><\/a><\/p>\n<p dir=\"ltr\">Decentralized exchanges have indelibly changed the way that cryptocurrencies are traded. But in the grand scheme of things, the <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/technology\/\" data-internallinksmanager029f6b8e52c=\"4\" title=\"Technology\" target=\"_blank\" rel=\"noopener\">technology<\/a> that\u2019s driving these platforms is relatively young\u2026 meaning it\u2019s inevitable that teething problems have emerged.<\/p>\n<p dir=\"ltr\">Some of the heavy hitters that dominate the market at present are known as non-orderbook markets. While it\u2019s tantalizing and somewhat romantic that these platforms are controlled purely by supply and demand, it often results in some unexpected downsides.<\/p>\n<p dir=\"ltr\">There\u2019s one glaring disadvantage that we don\u2019t need to mention too extensively \u2014 high swap fees. We currently live in a world where it can cost hundreds of dollars to execute a small number of seemingly straightforward transactions on the best-known decentralized finance protocols. For the DeFi sector\u2019s true potential to shine, these transfers need to be cheaper and faster than anything a centralized rival can provide.<\/p>\n<p dir=\"ltr\">Annoyingly, one of the things that makes cryptocurrencies so exciting can also stand in the way of these assets being practical as a medium of exchange\u2026 and that\u2019s blockchain. On networks like Ethereum\u2019s, miners end up prioritizing transactions that pay the highest gas fees \u2014 and this can prove calamitous for traders who are in a hurry. Opportunistic users who aim to snap up tokens at low prices risk ending up paying much more than they bargained for, especially if an asset\u2019s value has risen by the time the trade is finalized.<\/p>\n<p dir=\"ltr\">We\u2019ve also seen institutions begin to take a growing interest in this space \u2014 and in many cases, these corporations can be big spenders who like to snap up their digital assets in bulk. Right now, DeFi can end up being a poor fit for those seeking to execute big trades, and that\u2019s because the size of these transactions can end up dwarfing the liquidity that\u2019s available in the market.<\/p>\n<p dir=\"ltr\">Experiencing all of these hurdles also assumes that you\u2019ve managed to get to the stage where you\u2019re comfortable with using a DeFi protocol. Clunky, confusing user interfaces can make these ecosystems exceedingly off-putting \u2014 even to those who know their way around a traditional trading platform. And given the calamitous consequences that can arise if funds are sent to the wrong place, or if a wrong number is typed into a box, it\u2019s crucial for newcomers to have confidence.<\/p>\n<p dir=\"ltr\">At first glance, it seems a radical rethink is needed to build upon the extraordinary success that first-generation protocols have enjoyed already \u2014 protecting the attributes that make DeFi platforms so popular, all while ripping a few pages out of the playbook used by centralized rivals. The end result can be enjoying the perks that a CEX provides, without the inherent dangers associated with putting trust in a third party.<\/p>\n<p dir=\"ltr\">What if bulk buys and bulk sales could be performed without liquidity being a concern, and an asset\u2019s price going through the roof? What if decentralized finance protocols didn\u2019t involve putting up with endless bottlenecks that affect a trader\u2019s bottom line? Is there a way of ensuring that everyone\u2019s transactions are equal, and can all of this be achieved while a user has full control of their funds?<\/p>\n<h2 dir=\"ltr\"><span class=\"ez-toc-section\" id=\"%E2%80%98The_perfect_decentralized_exchange\"><\/span>\u2018The perfect decentralized exchange\u2019<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p dir=\"ltr\">One top priority for the crypto sector needs to center on ensuring that a trading platform, decentralized or otherwise, gives equal opportunities for all. The design of some ecosystems often creates an unpleasant trade-off \u2014 one that benefits traders more than market makers, or vice versa.<\/p>\n<p dir=\"ltr\">Orderbooks can serve as a knight in shining armor here \u2014 responding to changes in global sentiments on traded assets in a split second. This can help eliminate the price slippage that oh, so many traders end up grumbling about\u2026 and put an end to the agonizing waits traders experience while their urgent transactions wind their way through the blockchain at glacial speed.<\/p>\n<p dir=\"ltr\"><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.polkadex.trade\/\">Polkadex<\/a> Orderbook brings such a concept to life \u2014 ensuring makers can create markets by placing buy and sell orders, and takers can consume them. The project delivers a layer-two system on top of the Polkadex Network, and it\u2019s claimed that the orderbook can accept trades in 20 milliseconds \u2014 with capacity for 500,000 trades to be processed per second.<\/p>\n<p dir=\"ltr\">Frontrunning becomes a distant memory by getting rid of fees altogether \u2014 meaning there\u2019s a \u201cfirst come, first serve\u201d mentality toward processing trades. Simultaneously, this deals with the recurring issue of blockchains being too expensive to use.<\/p>\n<p dir=\"ltr\">Although this may initially seem like there\u2019s a risk of centralization creeping into the DeFi space, an innovative twist comes in the form of decentralized Know Your Customer checks. User privacy is preserved thanks to how Polkadex never ends up receiving the details of the traders who use its platform \u00ad\u2014 instead, they merely receive cryptographic proof that the checks have been completed.<\/p>\n<p dir=\"ltr\">Users remain in control of their funds at all times, and traders can also delegate their assets to a third party to benefit from algorithmic trading. An array of trading bots is also supported \u2014 including high-frequency trading bots that are geared toward investors of all sizes, giving everyone that split-second advantage that often proves crucial in a fast-moving market. Risk management bots, powered by machine learning, are also becoming more popular.<\/p>\n<p>Polkadex is also set to offer a fully on-chain IDO platform that will deliver a one-stop-shop for new projects, from the fundraising stage to the listing of tokens, all while removing barriers to entry for consumers who want to get on the ground floor of startups they\u2019re passionate about.<\/p>\n<p dir=\"ltr\">According to Polkadex, decentralized exchanges need to evolve \u2014 and need to evolve now. The team behind this project believes their <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>roach, which blends a fast orderbook and plentiful levels of liquidity with a slick user experience, could fire the starting gun on a new generation of DeFi.<\/p>\n<div style=\"background-color: #f0f0f0; padding: 8px 21px; font-weight: bold; color:#253137;\">Learn more about <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.polkadex.trade\/\" style=\"color: #253137\">Polkadex<\/a><\/div>\n<div id=\"post-content\">\n<p><span style=\"font-size: 12px; color: rgb(169, 169, 169);\"><span style=\"font-weight: 600\">Disclaimer.<\/span> Cointelegraph does not endorse any content or product on this page. 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Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/we-all-know-the-issues-with-defi-but-what-are-the-answers\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;# We all know the issues with DeFi \u2014 but what are the answers? &#8221; Decentralized exchanges have indelibly changed the way that cryptocurrencies are traded. But in the grand scheme of things, the technology that\u2019s driving these platforms is relatively young\u2026 meaning it\u2019s inevitable that teething problems have emerged. Some of the heavy hitters&#8230;<\/p>\n","protected":false},"author":1,"featured_media":239118,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS9zdG9yYWdlL3VwbG9hZHMvdmlldy81MGUwNDQ1ZmEwNmQ3MTQyOWNjYzYzMGRkNGQ4ZmQxMi5qcGc=.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74877,75239,74868,74891,75168,74892],"class_list":["post-239117","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-decentralized-exchange","tag-decentralized-finance","tag-defi","tag-ethereum","tag-polkadot","tag-tokens"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/239117","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=239117"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/239117\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/239118"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=239117"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=239117"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=239117"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}