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Experts Roundtable: What DEXs Must Do Better for Adoption

Experts Roundtable: What DEXs Must Do Better for Adoption

Binance, one of the most prominent cryptocurrency exchanges in the decentralized finance (DeFi) industry, was recently hit with one of the biggest fines in crypto history. As part of its plea deal, the company is set to pay a $4.3 billion fine, and its co-founder and former CEO, Changpeng Zhao (CZ), had to step down from his position.

Following the Binance debacle, Bittrex Global, another crypto exchange, has decided to stop its operation in the United States.

The murky Proof of Reserves and ensuing lawsuits and regulatory uncertainty of CEXs have led many people to leap to decentralized exchanges (DEXs).

So we ask the experts: What can DEXs learn from their centralized cousins in 2024?

Binance Plea Deal Highlights Importance of DEXs in Crypto Space

DEXs manage to solve several problems either caused or suffered by CEX centralized exchanges (CEXs) like Binance and FTX.

A large part of that is removing the centralized “moneypot” and authority, David Bleznak, the managing partner at Draper Goren Blockchain (DGB), told Technopedia.

“In an ideal world, there would be no central entity to incur penalties or fines if the DEX is actually decentralized. However, in practice there are usually parties involved in getting the DEX off the ground or even further operating some critical infrastructure (see Uniswap Labs).

 

These entities can follow the law and continue to forgo hosting front-ends that facilitate trading of fraudulent tokens or other prohibited activity.”

Anndy Lian, the author of NFT: From Zero to Hero, added that the recent Binance news highlighted how important decentralized exchanges are for cryptocurrency.

“Binance is facing legal challenges from various regulators around the world, who accuse the platform of violating financial laws and facilitating illicit activities.

 

“This has raised concerns among users about the security, privacy, and accessibility of their funds and data on centralized platforms. DEXs, on the other hand, offer a more decentralized and trustless alternative, where users can trade directly with each other without intermediaries or censorship.”

Moreover, DEXs allow users to have access to a much more comprehensive range of crypto assets and services like derivatives, lending, and non-fungible tokens (NFTs) that may not be available or compliant on centralized platforms.

DEX Regulatory Compliance – A Must

Regulatory compliance is one of the most crucial aspects DEXs must remember to prevent a recurrence of events similar to those surrounding Binance, Lian told Technopedia.

Adhering to regulatory standards ensures legal scrutiny and oversight, fostering trust among users, exchanges, and authorities.

Lian stressed:

“While DEXs may not have a central authority or entity that can be held accountable, they still need to respect the laws and rules of the land, especially when it comes to anti-money laundering, counter-terrorism financing, consumer protection, and taxation.”

Unfortunately, the recent events surrounding Binance have forced an array of negative headlines to circulate in the cryptocurrency industry; however, the fact that the Binance case has been settled provides some stability and certainty within the space, Ben Weiss, the CEO and co-founder at CoinFlip, noted.

“The issues facing Binance have shown that where a company is based won’t impact the basics of sanctions screening and AML/KYC.

 

“I believe decentralized exchanges are going to also be expected to perform the basics of AML/KYC and sanctions screening, and just because an exchange is decentralized doesn’t mean governments won’t expect their laws and regulations to be followed.”

Lian added that DEXs could use the Binance case as a case study to strengthen their operations by implementing appropriate measures and mechanisms to ensure AML/KYC compliance, geo-blocking, governance, and auditing. Moreover, DEXs can also collaborate and communicate with regulators and policymakers to ensure nothing goes unnoticed.

DGB’s Bleznak said:

“It has taken a long time for the true (crypto) believers to accept that code is not law… law is law, and we have not just a responsibility but an obligation and civic duty to uphold the rule of law.

 

It is important, no matter how decentralized we make these systems, to keep this perspective. Further, we should all act morally outside of the rule of law and choose not to cut corners or let our greed get the best of our decision-making.”

Education and Staying Up-to-Date Are Key

According to Lian, one of the key challenges faced by DEXs is the lack of awareness and understanding among users about the risks and benefits associated with decentralized trading, which is why educating users is another key aspect DEXs must consider.

“Decentralized trading can offer users more freedom, choice, and control over their assets and transactions, but it also requires more responsibility, knowledge, and skill.

 

“Users need to be aware of the potential pitfalls and dangers of decentralized trading, such as volatility, liquidity, slippage, scams, and bugs. Users also need to be familiar with the technical aspects and mechanisms of decentralized trading, such as wallets, keys, gas fees, swaps, and pool.”

However, this can be easily achieved through  “comprehensive guides, interactive tutorials, and community engagement initiatives,” DGB’s Bleznak explained.

Another initiative DEXs could consider is partnering with educational platforms and influencers in the digital assets industry, which could broaden their reach.

However, because DEXs leverage the power of smart contracts, staying up to date with the latest technological developments is another key aspect DEXs should keep in mind in the new year, CoinFlip’s Weiss added.

“The biggest challenges for DEXs are related to the user experience, such as complicated interfaces and thin liquidity.  That said, DEXs are innovating rapidly such as by using layer 2 solutions to increase scalability and capacity.”

In addition, DEXs can also leverage emerging technologies like Layer 2 scaling solutions, sharding, and cross-chain interoperability to address some of the current challenges they may face, like high transaction fees, network congestion, and limited asset diversity, Bleznak said.

“Implementing these technologies can enhance the user experience by reducing transaction costs and improving transaction speeds.”

DEXs Have Big Potential to Democratize Finance

CoinFlip’s Weiss noted that DEXs “have a lot of potential to democratize finance” because they eliminate the intermediaries present in traditional finance and are especially important in countries that have historically had little banking and financial infrastructure.

“DEXs are harder to navigate than CEXs from both a user learning curve and user interface perspective.

 

“That said, because the wallets are non-custodial, DEXs can be a more secure option than a CEX but only if the user has the sophistication level necessary to navigate a platform that will more likely have a complicated interface and require knowledge of crypto.”

DEXs Can Strike a Balance Between User Privacy and Security

Moreover, DEXs can balance user privacy and security by leveraging advanced cryptographic techniques like zero-knowledge proofs, which enhance privacy while maintaining security.

User privacy is one of the main advantages of DEXs as users can trade anonymously without disclosing their personal information or financial data, Lian added.

“However, user privacy can also pose risks and challenges, such as fraud, theft, hacking, and abuse. Therefore, DEXs need to implement robust security measures to protect users and their funds, such as encryption, multi-signature, smart contracts, and insurance.

 

“DEXs can strike a balance between maintaining user privacy and implementing robust security measures by adopting a risk-based approach, where they apply different levels of verification and protection depending on the type, size, and frequency of transactions.”

The Bottom Line

In navigating the challenges posed by the recent Binance lawsuit, decentralized exchanges must prioritize regulatory compliance, emphasizing adherence to legal standards that will build trust among users, the exchanges themselves, and regulating bodies.

Educational initiatives are crucial to raising awareness about the risks and benefits of decentralized trading, requiring DEXs to provide comprehensive guides and engage with the community.

Meanwhile, staying abreast of technological advancements, leveraging emerging solutions, and finding a balance between user privacy and security will be key in unlocking the vast potential of DEXs in 2024.

 

 

 

Source: https://www.techopedia.com/decentralized-exchanges-adoption-challenges-expert-panel

 

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
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Anndy Lian: “Opening Banking is good. Defi is better. It can fill up the existing financial gaps.”

Anndy Lian: “Opening Banking is good. Defi is better. It can fill up the existing financial gaps.”

The modern-day, tech-savvy consumers’ demand for a more avant-garde service, gave rise to what’s now called the open banking revolution. And, it is changing the way transactional data is shared, used and stored outside Financial Institutions.

This paradigm shift is actively transforming the payments landscape, and with cryptocurrencies squeezing their way toward the innovation space, it looks like it’s set to play a significant role. Crypto Curry Club spoke to BigONE Exchange Chairman, Anndy Lian to discuss the potentially life-changing opportunities that Open Banking brings and how crypto can be leveraged in this new scene.

What is Opening Banking?

Open banking is a banking practice that allows third-party financial service providers to access consumer banking and financial data via application programming interfaces (APIs).

Why do credit bureaus use open banking?

Credit bureaus need to access and process customer information in order to accurately determine creditworthiness. Open banking reduces administrative costs by eliminating manual document collection. Furthermore, open banking allows credit bureaus to analyse consumption patterns, such as overspending, to provide better credit scores (Julio, 2021). Additionally, open banking prevents fraud through authentication and verification of the validity of data (Julio, 2021).

In the video, Anndy and Erica discussed the following topics:

[00:02:01] Give an overview of what open banking is. How is this bringing some disruption and some benefits to the traditional roles of things like lending and credit?

[00:04:51] Do you see any other benefits to the area of credit decision?

[00:08:05] How specifically do you see open banking benefiting people who are either looking to get in crypto or who are already in the crypto space?

[00:12:25] Have you seen a large take up for that sort of access of on ramping via open banking on your exchange?

[00:15:58] What are some of the security benefits that open banking brings?

[00:17:51] What do you see is next for open banking in terms of helping the credit, lending space, and the crypto exchanges picking up this technology of using open banking?

“Open banking prevents fraud through authentication and verification of the validity of data. For financial service providers, open banking will allow financial service providers to significantly innovate on their product offerings to businesses. For businesses, opening banking will mean more effective and efficient financial tools in their business. For customers, it will mean better ways to spend, borrow, and invest.

Opening Banking is good. Defi is better. It can fill up the existing financial gaps.”

 

About Crypto Curry Club:

The Crypto Curry Club connects like-minded individuals to come together and affect real change that innovates our future while driving businesses forward.

 

About Anndy Lian:

Anndy Lian is an all-rounded business strategist in Asia. He has provided advisory across a variety of industries for local, international, public listed companies and governments. He is an early blockchain adopter and experienced serial entrepreneur, book author, investor, board member and keynote speaker. Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. He is also the Chairman, Asia for BigONE Exchange.

 

About Erica Stanford:

Erica is the Founder of Crypto Curry Club. She is also the author of Crypto Wars: Faked Deaths, Missing Billions and Industry Disruption published by Kogan Page.

The full video can be found at:

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j

Hackernoon Meet the Writer Anndy Lian: “Let’s work together to make crypto better”

Hackernoon Meet the Writer Anndy Lian: “Let’s work together to make crypto better”

This story is a part of Hacker Noon’s Meet the Writer series of interviews. The series is intended for tech professionals contributing the most insightful Hacker Noon stories to share more about their writing habits, ideas, and professional background (and maybe a hobby or two).

If you too would like to start contributing to Hacker Noon, you can do so here.

 

So let’s start! Tell us a bit about yourself. For example, name, profession, and personal interests.

My name is Anndy. I’m a business strategist and experienced serial entrepreneur with over 15 years of experience in Asia. I’ve worked in various industries for local, international, and publicly traded companies. I am currently Chairman of BigONE Exchange and Chief Digital Advisor at the Mongolian Productivity Organisation.

I’ve also written a best-selling book titled “Blockchain Revolution 2030”. With my co-authors, we share insights on how blockchain technology plays an important foundation for the Fourth Industrial Revolution.

I recently joined the EG Association, a social impact-driven organization that aims to use cryptocurrency to do good. To date, we have deployed more than $3 million supporting social impact initiatives on the ground.

 

Interesting! What was your latest Hackernoon Top story about?

My recent article focused on the rise of so-called reflective tokens, which are starting to be used more and more by crypto startups, such as SafeMoon. The tokenomics model differs significantly from that of other DeFi tokens. In simple terms it works by automatically charging a tax, which is usually 10% on each transaction.

The reflection mechanism is a relatively new concept in cryptocurrency circles, and it still requires a lot of fine-tuning before it can be widely adopted by other projects. However, in principle, it reduces panic selling to a bare minimum, which could be significant for the DeFi industry.

 

Do you usually write on similar topics? If not, what do you usually write about?

I think it’s important to write about the diversity of subjects in the blockchain and crypto industry, as it’s a sector that growing so quickly and with a lot of opportunities. I’m fascinated about ‘connecting the dots’ between business and technology, a great example being the use of DeFi and NFTs in developing an open metaverse.

 

Great! What is your usual writing routine like (if you have one?)

Before starting to write I believe it’s important to have a routine for reading each day. I try to find time to catch up with the main news headlines, as well as the main crypto news sites like Cointelegraph. Then when I come to writing I find that reading helps make my articles both accessible and valuable. I also get my inspiration from the governments that I am advising, their problems and questions become part of my writing content too.

 

Being a writer in tech can be a challenge. It’s not often our main role, but an addition to another one. What is the biggest challenge you have when it comes to writing?

The challenge is often one of translation, explaining technical details around say a new form of tokenomics to an interested but non-technical audience such as crypto investors.

 

What is the next thing you hope to achieve in your career?

I want to share the right kind of crypto knowledge with people. Right now many of the people I see in various communities are not being real. Some of them want their government to be decentralized, others want to be rich overnight by doing nothing, then some others are just here to create FUDs. If proper information is being shared and the users are aware of what is really happening, such ‘behaviours’ would be minimised.

Maybe this is not a career goal, it is more like an industry-wide goal that I set for myself.

 

Wow, that’s admirable. Now, something more casual: What is your guilty pleasure of choice?

Since getting grounded and not being able to travel, I have been very involved in donations and charitable works. In fact, those who know me, know that I am donating more than I spend. My guilty pleasure, for now, is walking into Hermes, buying a few pairs of shoes instead of donating. Then again, Zoom meetings did not need me to travel much, maybe a comfortable Uniqlo t-shirt would do just fine.

 

Do you have a non-tech-related hobby? If yes, what is it?

I enjoy travelling, meeting new people from all walks of life, and sharing ideas.

 

What can the Hacker Noon community expect to read from you next?

I’m always on the lookout for new topics in crypto and blockchain that illuminate and inspire my readers! I might be talking more about metaverse and gameFI. Let’s see.

 

#Thanks for taking the time to join our “Meet the writer” series. It was a pleasure. Do you have any closing words?

“The time is always right to do the right things.” I hope to gather more like-minded people to do that together for the crypto industry. Let’s work together to make crypto better!

Lastly, it’s great to join the Hacker Noon community and to share my writing on crypto and blockchain.

 

Original Source: https://hackernoon.com/meet-the-writer-anndy-lian-lets-work-together-to-make-crypto-better

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
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