Cross-chain liquidity aggregation as the future of DEXs | Q&A with Chainge
Many decentralized exchanges boast cross-chain capabilities, but in fact, the majority of them simply use bridging technology to perform swaps. To bring complete decentralization to crypto trading, one exchange has developed a fully cross-chain liquidity aggregation mechanic that does not rely on bridging.
Find out more about cross-chain liquidity in the latest Cointelegraph interview with Chainge founder Dejun Qian.
Q: What is the biggest problem facing DEXes at the moment, and why is it such a challenge?
DEXs have several problems, among which the most notable are: lack of liquidity, inefficient/hazardous interoperability solutions, and user experience.
The first two issues are partially correlated: Lack of liquidity is one of the primary reasons why some traders still prefer using CEXs. And it’s pretty difficult for DEXs to catch up since they have to rely on liquidity providers and can only access liquidity on one single chain. So naturally, users will go where they find better prices.
In addition, interoperability solutions like traditional bridges fall short when it comes to security and are a headache to use. On the UX side, DEXs seem to be made for connoisseurs. Traders have to know about chains, slippage, and impermanent loss, while on CEXs, trading is pretty straightforward.
Chainge focused on solving all 3.
Q: Why is interoperability still so hard to achieve across the global blockchain space?
In short: lack of resources. New blockchains and crypto assets keep popping up every day. With the lack of a bigger development community to work on bridges, the code isn’t audited as it should be for potential bugs. So, as it happens, developers build bridges upon bridges in an attempt to cover as much of the blockchain market
Read more on cointelegraph.com
