๐Ÿ›๏ธ Context

Decentralized exchanges (DEX) are one of the most significant use cases of DeFi. They enable users to exchange assets in a decentralized, permission-less, and non-custodial way. This innovation has gained popularity due to its ability to provide users with greater control over their assets and the potential to revolutionize the financial industry.

The importance of decentralization and user custody of funds

The importance of DEX cannot be underestimated, particularly when considering issues that have arisen in the traditional financial sector, such as failures of centralized organizations or user abuse. Even in the crypto space, recent events like the Celsius and FTX incidents serve as stark reminders of what happened in 2014 with Mt.Gox.

These incidents highlight the importance of creating a secure and trustworthy environment for users to transact. DeFi's decentralized nature allows us to remove these risks and create a more secure place for traders.

A fast-growing market

As the crypto market matures, DeFi will grow with it, and DEXs will take more and more market share from centralized exchanges (CEX) for several reasons:

  • Trust in centralized institutions is lost, dramatic events like the FTX incident are a good reminder of the usefulness of DeFi,

  • DEXs are becoming more innovative, offering features similar to CEXs and even some that are not found on CEXs (e.g., the ability to become a liquidity provider);

  • The DeFi UX is improving at the infrastructure level, for example, with the rise of L2 solutions, which allow users to benefit from a decentralized environment while having fast and inexpensive transaction finality, or the Account Abstraction, which provides the same security functionalities and UX as in web 2.0.

The potential of DEX is even greater when considering that:

  • Cryptocurrency is still small compared to traditional finance.

  • The development of DeFi is in its early stages.

  • The market share of DEX is small compared to CEX.

Therefore, the growth potential of DEX is enormous, and demand for these solutions will only increase.

At Metavault.Trade, we aim to participate in this revolution and growth by offering a solution that meets the tradersโ€™ needs for decentralized and non-custodial trading.

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