Recently, crypto dealers have shown much enthusiasm for decentralized exchange or DEXs. Enthusiasm is justified. We started seeing the fruits of many years of hard work as DEX trading volumes increased day by day.

Despite this growth, the vast majority of cryptocurrencies still occur on the central exchanges. DEXs offer a clear set of benefits when it comes to financing security, flexible incubation and transparency, so why do the majority of the market still avoid them in favor of centralized alternatives? We think we know the answer, and we've spent the past year and a half building the next generation of DEX that can keep up with central exchanges. We are continuing to make progress, and we will share some of the considerations, ideas and observations that have shaped our innovation.

About market makers
Market participants manage the cryptocurrency. They bring much-needed liquidity to platforms without which it cannot attract traders and end-users. Market makers are the backbone of roller wheels. Additional liquidity provides more traders, which gives more market makers, which gives more liquidity – and so on.

We spent countless hours talking to some of the most influential merchants and market makers in the industry, and two things are clear:

(Almost) none of them are promoting on DEX today

They are all interested in marketing on DEX in the future.

So what's the problem? The glittering problem is that market makers have spent millions of dollars and hours working to create technology and human capital to interact with existing exchanges. These systems are built with certain performance and feature assumptions – assumptions that all existing DEXs violate. We cannot expect market participants to rebuild their systems from scratch to a small portion of the market in general. If we are to succeed in central exchanges, we must meet these important players where they are today.

What is missing in DEXs?
You might think you already know the answer. Everyone heard criticism that the current generation of DEX is not scalable. Several teams are trying to tackle this problem by implementing second-tier systems that can lower transaction costs for trade settlements.

This new development is large and provides much needed space for growth – assuming someone uses the product first. Level two systems only remove growth restrictions; They do nothing to make the exchange an attractive product in the first place. Any serious commercial product must first meet the bar identified by the current alternatives before it can compete for a unique seller offering in terms of DEX storage flexibility and transparent financing.

So what is really happening? If we take a deeper look at the current situation with decentralized trading products, we can conclude that three main problems hinder DEX and hinder wider adoption and use:

1. High latency and low performance

These elements cause a variety of problems. Front-wheel drive system and commercial collisions violate price priority and lead to unfair commercial execution. The delay in executing deals or cancellations makes it impossible for market participants to spread deep and extensive messages so that they do not risk being violent due to price changes in other arenas.

To solve this problem, the control panel must have a high-performance drive and memory. It should also be able to handle traffic outages and hundreds of thousands of requests per second with a low response time in milliseconds. A two-layer monolayer system is not sufficient to provide performance and performance guarantees that meet market requirements.

Lack of non-standard features and formats

Market makers and algorithm dealers have a wide range of squares. These players are looking for new opportunities not only in terms of revenue and potential revenue that they will get, but also in terms of pre-merger costs and ongoing maintenance costs. This relationship between opportunity and price is the most crucial factor because it reflects the performance of their development work and capital.

The DEX index must be 100% ready to go so new members can join and provide liquidity with minimal effort. After all, if you've already reached a successful strategy, then why do you waste time reformulating it to suit a market share of less than 2%? This includes submitting the same types of advanced requests as other first-rate exchanges, as well as coordinating the API and documents that are in line with emerging informal standards.

Source: CoinTelegraph