Decentralized Aggregators Emerge As The Regulatory Workaround For CEXs And DEXs By DailyCoin
There is no denying that both centralized exchanges (CEXs) and decentralized exchanges (DEXs) have contributed immensely to the growth of the crypto ecosystem.
The increased regulation from governments and financial institutions around the world is limiting further growth. Many CEXs and DEXs have difficulty operating in some jurisdictions due to the new policies and regulations that are being introduced frequently, sometimes with very little warning. Leading centralized exchanges are already running into problems with country-specific regulations. These range from ordering the removal of certain services and products to banning them altogether.
Binance, one of the most important crypto exchanges is experiencing first-hand the consequences of strict regulatory policies. The number of regulators suing Binance keeps growing. Last month Binance was notified by the Monetary Authority of Singapore, which forced it to modify its services. From September 10th onwards, Binance will cease offering “SGD trading pairs” and “SGD payment options” to remain compliant with local regulations.
Regulations will become more stringent as crypto markets expand. Recent speech by Gary Gensler, new chairman of the Securities and Exchange Commission (SEC), highlights this fact. At the Aspen Security Forum, he compared the crypto ecosystem with the “Wild West” and has made it clear that the SEC will use its powers to the fullest to protect investors and ensure that exchanges aren’t falling between “regulatory cracks.”
The SEC Chairman also clarified that his agency has its eye on DeFi and is currently building an appropriate regulatory framework. Uniswap (one of the most important decentralized exchanges) is now being questioned.
Decentralized exchanges like Uniswap offer DeFi services – not just cryptocurrencies, but several other products like derivatives markets, futures contracts, and more. As a result, DEXs will soon fall under SEC purview and other country-specific regulations, making it difficult for users to enjoy the full extent of “decentralization.”
Decentralized Gateways To The Entire Crypto Market
The increased regulations facing both CEXs and DEXs have also impacted users. It is difficult and time-consuming to register an account with centralized exchange platforms.
Before registering an account on a centralized exchange platform, users must undergo multiple KYC and AML checks. This can sometimes take several weeks. Signing up for CEX accounts means you are giving control over your funds to the provider. This is an issue for serious users. It is therefore difficult for new users to trade via central exchanges.
On the other hand, decentralized exchanges aren’t user-friendly. It is not an option that most people would prefer. Users must have some knowledge about blockchain technology in order to navigate DEXs.
Here is where decentralized aggregaters can help. They save time while providing decentralized access and accessibility to all crypto markets. Orion Protocol, one of these solutions provides global access and decentralization to all crypto markets. Orion Protocol, the first platform to combine cross-sectional liquidity, allows its users seamless trades on Binance, KuCoin and other popular exchanges, without any geographic restrictions.
Orion Protocol, one of the most innovative decentralized platforms ever created, effectively aggregates all centralized and decentralized exchanges (CEX), as well as swap pools. Orion Protocol’s unique governance method, Delegated Proof, removes the requirement that users create multiple accounts in different markets or go through several KYC and AML checks.
Rocket Vault (Applied Artificial Intelligence, Machine Learning) is another promising platform. It aims to redefine cryptocurrency value investing. Rocket Vault’s team is currently building RocketX, a global liquidity aggregator which supports cross-chain Swaps. RocketX simplifies cryptocurrency trading, providing liquidity access across CEXs or DEXs through a single interface. Users can trade with any wallet on any network.
Amidst the tightening regulatory policies and the inherent problems with CEXs and DEXs, decentralized aggregator platforms like Orion Protocol and RocketX will not only allow users to retain complete control over their accounts but also lower crypto’s entry barriers by allowing users to access the entire crypto ecosystem at the click of a button.
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