The past few weeks had seen mayhem across the crypto sector precipitated by the collapse of one of the largest cryptocurrency exchanges, FTX, helmed by Sam Bankman -Fried. FTX crash, coupled with recent failures of Voyager and Celsius, has once again brought to the fore the need for on-chain, public, and transparent, decentralized exchanges (DEXs) to replace centralized exchanges (CEXs) finally. Despite the fallacies associated with centralized counterparts, DEX has a long journey to complete before overtaking its centralized counterparts as the main channel for crypto trading.
CEXs vs. DEXs: When Can The Industry Accept DEX
DEX is the future, but today the climate is not suitable for decentralized exchange. Many factors limit the utility of DEX, and the most glaring is the quality of the infrastructure, where CEX scores many times as compared to DEX. Also, DEX does not support numerous trading stratagems like limit orders, range trading, and dollar-cost averaging (“DCA”), stopping many retail and institutional clients from adopting DEXs at scale.
Carbon DEX Aims to Bring CEX Capabilities to DeFi
In this new situation, Carbon DEX has entered, and it has a newly announced decentralized exchange that could help counter the monopoly of centralized exchanges. As per a tweet, Carbon DEX is unveiling its “Asymmetric Liquidity” model, which will amalgamate the advantages of CEXs with DEXs.
Carbon has released its lite paper which envisages a novel kind of on-chain liquidity Carbon DEX that permits the formation of personalized trading and active market-making approaches restricted by one or multiple adjustable “bonding curves” instantaneously. The trader will also benefit from obtaining liquidity to two curves that each trade in one direction. In this design, the buying and selling of an asset are governed by separate, user-customized curves, giving users greater control to prompt their trading preferences.
As detailed in Carbon’s “litepaper,” Asymmetric liquidity is a new form of A bonding curve that is effectually the essential math shaping how a given AMM algorithmically implements on-chain trades. Unlike previous AMM models, where a trader only had the option of choosing a single curve and range in which to place their liquidity, Carbon DEX gives users the ability to provide a two-curve approach where one angle buys ETH between 1200 and 1300 USDC and the other curve vends ETH between 1500 and 1600 USDC. ETH accrued in the first curve becomes promptly accessible to sell for USDC as prices cross into the range defined in the second curve.