{"id":541174,"date":"2023-01-20T00:30:00","date_gmt":"2023-01-19T21:30:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/decentralized-forex-will-reduce-cost-by-as-much-as-80-report\/"},"modified":"2023-01-20T00:30:00","modified_gmt":"2023-01-19T21:30:00","slug":"decentralized-forex-will-reduce-cost-by-as-much-as-80-report","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/decentralized-forex-will-reduce-cost-by-as-much-as-80-report\/","title":{"rendered":"# Decentralized forex will reduce cost by as much as 80%: Report"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 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-6a2ee4125b4f9\" 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-6a2ee4125b4f9\" 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-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/decentralized-forex-will-reduce-cost-by-as-much-as-80-report\/#%E2%80%9D_Decentralized_forex_will_reduce_cost_by_as_much_as_80_Report_%E2%80%9C\" >&#8221; Decentralized forex will reduce cost by as much as 80%: Report &#8220;<\/a><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9D_Decentralized_forex_will_reduce_cost_by_as_much_as_80_Report_%E2%80%9C\"><\/span>&#8221; Decentralized forex will reduce cost by as much as 80%: Report &#8220;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<div class=\"post-content\" data-v-5a4050f8>If the foreign exchange market starts using DeFi protocols instead of the current centralized systems, the cost of remittances could be <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/papers.ssrn.com\/sol3\/papers.cfm?abstract_id=4328948\">reduced<\/a> by \u201cas much as 80%,\u201d according to a Jan. 19 paper jointly published by researchers at Circle and Uniswap.<\/p>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\">On-chain foreign exchange (FX) is a new model of global value exchange that offers a faster, cheaper, and more efficient alternative for cross-border payments.<\/p>\n<p>Our recent research paper with <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/circle?ref_src=twsrc%5Etfw\">@circle<\/a> has it all <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/t.co\/NGniRo8yrp\">https:\/\/t.co\/NGniRo8yrp<\/a><\/p>\n<p>\u2014 Uniswap Labs  (@Uniswap) <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/Uniswap\/status\/1616106328740470784?ref_src=twsrc%5Etfw\">January 19, 2023<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>The paper, titled \u201cOn-chain Foreign Exchange and Cross-border Payments,\u201d was written by Uniswap Data Scientist Austin Adams, Circle Chief Economist Gordon Liao, Mary Catherine Lader, David Puth, and Xin Wan.<\/p>\n<p>The authors studied trading activity of Circle\u2019s US Dollar Coin (USDC) and Euro Coin (EUROC) on Uniswap from July, 2022 to January, 2023. They found that the pair did $128m in volume total, with some days having volume as high as $8 million.<\/p>\n<p>During this time, the stablecoins USDC and EUROC traded within a few\u00a0basis points of exchange rates found in the wholesale forex market for their backing currencies, USD and EUR. In the authors\u2019 view, this showed that the DeFi forex market was providing a reasonable alternative to traditional forex, with good price efficiency, despite its smaller trading volume.<\/p>\n<p><strong>Related: <\/strong><strong>DeFi auditor nets $40,000 for identifying Uniswap vulnerability<\/strong><\/p>\n<p>However, the researchers wanted to know if using DeFi protocols like Uniswap could provide savings to participants in the forex market. So they analyzed the costs associated with the traditional \u201ccorrespondent banking model\u201d of forex vs. those associated with DeFi forex.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2023-01\/86a4632c-b232-466a-b86d-a5a62b6d45fc.png\"><figcaption style=\"text-align: center;\"><em>Correspondent model of forex vs. DeFi model. Source:<\/em> \u201c<em>On-Chain Foreign Exchange and Cross-Border Payments\u201d by Adams, Ladder, Liao, Puth, and Wan<\/em><\/figcaption><\/figure>\n<p>They used World Bank estimates to determine the price of a $500 remittance done through the global banking system. They then compared this to the cost of buying stablecoin (either USDC or EUROC) through an exchange, sw<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>ing it for the other coin on Uniswap, sending it to another person, and having the other person cash it out at an exchange.<\/p>\n<p>The researcher concluded that the DeFi model causes users to incur many different fees, including exchange commissions, DeFi trading fees, network fees, and fees for transferring cash to and from an exchange. Even so, the fees are up to 80% less than the average price of remittances, based on World Bank estimates.<\/p>\n<p>Circle released the EUROC in June, 2022. EUR\/USD is the most widely <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.investopedia.com\/terms\/forex\/e\/eur-usd-euro-us-dollar-currency-pair.asp\">traded<\/a> currency pair in the world, according to Investopedia.<\/p>\n<p><template data-name=\"subscription_form\" data-type=\"defi_newsletter\"><\/template><\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. 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\/decentralized-forex-will-reduce-cost-by-as-much-as-80-report\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8221; Decentralized forex will reduce cost by as much as 80%: Report &#8220; If the foreign exchange market starts using DeFi protocols instead of the current centralized systems, the cost of remittances could be reduced by \u201cas much as 80%,\u201d according to a Jan. 19 paper jointly published by researchers at Circle and Uniswap. On-chain&#8230;<\/p>\n","protected":false},"author":1,"featured_media":541175,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/cdn-cgi\/image\/format=auto,onerror=redirect,quality=90,width=1200\/https:\/\/s3.cointelegraph.com\/uploads\/2023-01\/460a3880-2ab9-4ac2-a2a3-9c468174ee79.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74863,74868,74891,75238,88323,75493,74355,70610],"class_list":["post-541174","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-cryptocurrencies","tag-defi","tag-ethereum","tag-financial-services","tag-financial-systems","tag-stablecoin","tag-adoption","tag-finance"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/541174","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=541174"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/541174\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/541175"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=541174"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=541174"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=541174"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}