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As we approach the dawn of Web3, many of you are wondering what the so-called new internet era will look like. Is it just trendy jargon, or is it a game-changing idea? How will Web3 change your online presence and the way you interact with audiences—from creating a website to branding and marketing your talents—especially for independent creatives and small businesses?
While there is still much to learn about Web3, experts, supporters, and detractors are already discussing hopes, technologies, potential benefits, and potential pitfalls. In addition, many brands and industries have begun to implement some fundamental Web3 components.
Web3 Pushes Centralized Exchange Away
Decentralized exchanges are one of the most popular and important features in the new Web3 era and centralized exchanges are already dropping in trading volume.
The ratio of spot trading volumes on decentralized exchanges (DEXs) to centralized exchanges increased for the second month in a row, surpassing 6% in August.
The ratio in July was 3.95%, as previously reported. The ratio broke out of a steady pattern above 1% in June, when it more than doubled from 0.84% in May to 2.10%.
August’s total DEX volume was more than $11 billion, a significant increase over July’s $4.4 billion.
Major CEXs are Holding Coins Hostage
Web3 offers instant access to your funds while top exchanges can hold your money in big volatile market trends and it can cost you a lot of money because you won’t be able to withdraw your coins.
Besides that, many centralized lending platforms went bankrupt along with the crypto of their users. This pushes people off from those platforms and brings them into the Web3 and world where decentralization matters the most.
CEXs Can be Manipulated
In the past few years there have been a lot of centralized exchanges that have been accused of abusing their opaque nature by engaging in insider trading, faking volume, and manipulating prices.
When centralized exchanges have all the info and data about their traders such as long/short order books, they can do whatever they want with that info, sell it to crypto whales and they can instantly calculate how much money they need to trade in order to push or break the price of a specific coin, in most cases, it is aiming for Bitcoin and Ethereum since the whole market depends on those two.
While on decentralized exchanges, this is not possible, so centralized exchanges need to improve a lot and to be fully secure and trusted they need to implement a decentralization which is not in their interest, so does this mean that the end of centralized exchanges is around the corner?
Now that we know that Web3 is far superior than centralized exchanges, it is time to sit back and watch how centralized exchanges will combat this tech giant without losing their users.
In order for centralized exchanges to survive the new wave of advanced technology, they will have to do a lot of improvement, but the question mark is, can they, and are they ready for a such step.
Disclaimer: The opinion expressed here is not investment advice – it is provided for informational purposes only. It does not necessarily reflect the opinion of EGG Finance. Every investment and all trading involves risk, so you should always perform your own research prior to making decisions. We do not recommend investing money you cannot afford to lose.