Centralized exchanges will serve as gateways for DeFi, according to dXdY Foundation CEO Charles d’Haussy.
Centralized exchanges will serve as gateways for DeFi, according to dXdY Foundation CEO Charles d'Haussy.
The Transition Towards Decentralization in the Blockchain Industry
The blockchain industry has been rapidly evolving, and one organization that recently made significant progress in this transition is the dYdX Foundation. As an independent nonprofit founded to support the dYdX protocol, they recently launched a public testnet for their latest version, v4. This milestone puts them ahead of schedule for the impending launch of the v4 mainnet, which they claim represents complete decentralization for dYdX.
In its current live version, dYdX is considered partially centralized. Although it doesn’t take custody of any user assets, it still relies on a centralized book order and matching system. The upcoming v4 version aims to solve this issue and achieve true decentralization. This transition is crucial for dYdX, as it moves over $1 billion in funds daily and is already recognized as the world’s largest decentralized exchange for perpetuals – bonds with no maturity date.
To better understand the implications of this transition, Cointelegraph had the opportunity to interview the CEO of dYdX Foundation, Charles d’Haussy, at the EthCC conference in Paris, France. He provided valuable insights into the move towards total decentralization and its impact on centralized providers of perpetuals.
According to d’Haussy, centralized providers should not be seen as competitors of the dYdX protocol. He acknowledged their early support in the market and highlighted that perpetuals were initially invented by BitMex, a centralized entity. This perspective reflects the CEO’s belief that the industry is in a transitional phase, heading towards what he calls “decentralized disruption.”
However, d’Haussy emphasized that this transition does not necessarily create a competition between centralized organizations and decentralized finance (DeFi). He sees room for both sides to coexist and even collaborate for the benefit of crypto customers. In fact, he envisions a future where centralized exchanges can serve as gateways to decentralized exchanges.
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The CEO explained that a centralized entity with know-your-customer (KYC) and risk profiles on customers could offer spot trading in-house, providing a more seamless integration with DeFi compared to decentralized exchanges. This concept is not unprecedented in the financial world. D’Haussy drew a parallel with traditional banking institutions that offer various services alongside their core business, such as insurance and mortgages.
This pattern of starting with a core business and expanding to offer relevant services is seen as a positive development for the blockchain ecosystem. D’Haussy believes that empowering people to adopt crypto services in a way that suits them is crucial. If individuals feel more comfortable managing their crypto experience through a centralized entity that provides access to DeFi, it can be a great solution.
In conclusion, the blockchain industry is witnessing a transition towards decentralization, with organizations like dYdX Foundation leading the way. The upcoming launch of the v4 mainnet represents a significant milestone in achieving complete decentralization for dYdX. While centralized providers of perpetuals may not be direct competitors, there is potential for collaboration between centralized exchanges and DeFi platforms. This transition presents opportunities for crypto customers to access DeFi services through centralized gateways. As the industry continues to evolve, it’s essential to empower individuals to adopt crypto in a way that aligns with their preferences and comfort levels.