Derivative DEXes Are Banding Together To Restore User Trust

Please fol­low and like us:
Pin Share

Decen­tral­ized exchanges Drift Pro­to­col, GMX and Per­pet­u­al Pro­to­col are part­ner­ing with Nansen to design a new ana­lyt­ics dash­board, hop­ing to restore user faith after the FTX fallout.

The lat­est dash­board will allow its users to visu­al­ize the health of the pro­to­cols in real time. They will also be able to access infor­ma­tion on proof of deposits, insur­ance funds, bor­row­ing lev­els and out­stand­ing prof­its and losses. 

FTX’s down­fall set the indus­try back dras­ti­cal­ly, and these decen­tral­ized exchanges — or DEX­es — want to ensure greater lev­els of trans­paren­cy in the space mov­ing for­ward as a “crit­i­cal first step to increase aware­ness of infor­ma­tion which already exists for decen­tral­ized exchanges.”

Fol­low­ing FTX bank­rupt­cy fil­ings, many tokens saw their val­ues plum­met. Among them was Solana’s native token, SOL, whose val­ue dipped by 34% since the begin­ning of November.

How­ev­er, there have been exceptions.

The lat­est report by Kaiko, a cryp­tocur­ren­cy mar­ket data provider, revealed the token of decen­tral­ized deriv­a­tives exchange dYdX surged by 18%, imply­ing that com­pe­ti­tion is bub­bling in decen­tral­ized deriv­a­tive markets. 

“The dif­fer­ence between cen­tral­ized finance (CeFi) and DeFi is becom­ing increas­ing­ly clear, and reg­u­la­tion needs to reflect the dis­tinc­tion between the two sys­tems,” the com­pa­nies said in a joint statement.

“A reg­u­la­to­ry sys­tem which makes no dis­tinc­tion between the two will mean that the ben­e­fits of DeFi will not be real­ized and is not fit for pur­pose,” the state­ment added.

‘DeFi or Nothing’

Regard­less of the dis­tinc­tion between CeFi and DeFi, OKX Glob­al Chief Mar­ket­ing Offi­cer Haider Rafique told Block­works that all cryp­to reg­u­la­tion may become more strict mov­ing for­ward now that “the face of cryp­to com­pli­ance has fallen.”

“I could see the SEC or the reg­u­la­tors in the Unit­ed States or glob­al­ly tak­ing a very harsh stance towards cryp­to reg­u­la­tion,” Rafique said. “It’s not good for our growth and our econ­o­my here, and my wor­ry is that after this inci­dent, we’re going to see some reg­u­la­tions that per­haps are not con­sid­ered com­mon sense regulation.”

This sen­ti­ment is shared by Som­me­li­er Finance founder Zaki Man­ian who told Block­works that the col­lapse of FTX — which was heav­i­ly engaged with insti­tu­tion­al coun­ter­par­ties in the US and tra­di­tion­al finance — sig­nals a greater prob­lem for the cryp­tocur­ren­cy space. 

“Reg­u­la­tion — in a sense that we should have [CeFi] but it should be bet­ter reg­u­lat­ed is not the answer,” Man­ian said. “Frankly, a per­pet­u­als exchange that exists in a cen­tral­ized set­ting shouldn’t exist, CeFi lend­ing insti­tu­tions shouldn’t exist — it’s DeFi or nothing.”

Much of the pain caused in the cryp­to indus­try has been tied to CeFi insti­tu­tions, Man­ian said.

“Block­Fi, Cel­sius, Voy­ager and FTX — every sin­gle one of them cre­at­ed a cen­tral­ized ver­sion of what exists in DeFi — but with weak [know-your-cus­tomer rules] and poor juris­dic­tion,” he said.

Get the day’s top cryp­to news and insights deliv­ered to your inbox every evening. Sub­scribe to Block­works’ free newslet­ter now.

Source link
Please fol­low and like us:
Pin Share

Leave a Reply

Your email address will not be published.