hybrix Feature Friday | July 30th

Every week we highlight a hybrix feature. This week we dive into: Decentralized Exchanges vs Centralized Exchanges

We Once Were Blissful
When we went public, hybrix started listing the HY token on both CEXs and DEXs (centralized exchanges and decentralized exchanges). We believed that listing on both would increase the visibility of the token and therefore create a greater, stronger and more liquid market for it. We were looking to attract users, and thought we could find them on both types of platforms. As time went by, however, that tune would change.

DEX

First let us talk a bit about decentralized exchanges and why we prefer the autonomy of these exchanges. It enables users to trade their assets in a way that suits the vision of hybrix; no custodial intermediary. On a DEX you keep your assets in your own wallet, and you don’t have to put your currency in a wallet that you do not have the private keys of. You stay the owner of your assets and are responsible for your own security. You are totally independent and know that your assets are and stay your own. These exchanges often also protect your personal data since you don’t have to share your identity with them. This enhances privacy and we love privacy.

Pros of DEXs

• Non-custodial: Your assets remain your own
• Privacy: No KYC necessary
• Security: You do not need to trust a third party with your assets
• Stability: Less price manipulation is possible when everything happens on chain

CEX

Centralized exchanges take your money and keep it in their own reserves. They use their own methods of bookkeeping to keep track of your trades and portfolio. Unlike a DEX a CEX needs no consensus mechanism, and thus is often fast and easy to use. This also reduces costs per trade, since on-chain consensus is not necessary, and thus there are no transaction fees on every trade. When you are (day)trading a CEX often offers you a lot of tools that are not (yet) represented in DEXs. For example leveraging is such a thing. It is relatively new for DEXs to provide it, if at all, and often the CEX experience when trading with leverage feels liquid.

Pros of CEXs

• Speed: Currently centralized exchanges offer a fast trading experience
• Lower fees: no on-chain transaction costs often means fees for trading are lower
• Liquidity: Often a CEX has more liquidity (although this is changing fast)

HY Wants Decentralization

The HY token is a cross-ledger token on multiple chains (a unified asset). This excels especially on DEXs where its technology enables users to utilize the benefits of different chains. Now you can trade assets across ledgers and not only on just one ledger system like Ethereum. Every ledger system has its uses. Ethereum attracts many new startups, while Tomochain offers extremely low fees using their TRC21 technology.
With hybrix HY you can move your assets across different ledgers without the need for an exchange. Sounds familiar? In the early days one of the unique things about Bitcoin was the fact that moving value between people became possible without intermediaries.

So why have we since then inserted middlemen? We have let them in because we wanted to exchange assets. This first happened through a centralized party: the exchange. In the heydays of Bitcoin these exchanges would often run off with the money of their users, or get hacked and lose it all, like in the now famous event of the MtGox debacle.

We believe that if we want to stay true to the initial belief that middlemen are unnecessary and overrated we have to ditch them. We must decentralize where possible, and otherwise federate if necessary. Educate people about how best to safeguard the money that they have worked hard for, and make sure they can use it in a safely decentralized way.

Price Manipulation and Monopoly

When we entered hybrix into the market of exchanges, it did not take us long to notice centralized exchanges aren’t in crypto for the kudos or karma. They are money making machines. If you want to add your project to their listing you have to pay them large sums of money. And even after paying that you are not secured of a position. In time they will try to demand market making fees, and will require you to send them your tokens into their custody (for liquidity) to become a puppet in their money making machine.

This gives us, the builders of real tools for people with a not-for-profit attitude a dissonant feeling. It seems in crypto these days you have to “roll with the big boys” by paying your way to the top, and becoming part of the financial elite there. Isn’t this exactly what Satoshi was fighting against when he introduced Bitcoin?

Instead we prefer building for everyday people and grow because of excellence, not just a bag of money. So to stay true to our beliefs we have decided to stop paying for listings on centralized exchanges and completely focus on decentralized exchanges.

The Obvious

Apart from two centralized listings, hybrix is listed on many decentralized exchanges. And we aim to list on more DEXs, and delist from all CEXs as this fits the nature of our project. We believe that decentralization and federation is the future of digital ledger technology, and we will keep fighting for it because of your security, privacy and ownership!