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Decentralized exchanges are desirable amongst traders. What are the advantages of creating an exchange on top of the EOS blockchain?

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BitShares is a good example of the advantages of decentralised Exchanges, which a similar dApp could be built upon EOS, it's also one of Dan Larimer's Blockchains.

Advantages of decentralised exchanges include

Proof of transactions

On centralised Exchanges like Binance, you rely on them as a private company to honour every transaction you make on their system. Yes you bought EOS at $15.30 but what stops them from changing it to $15.80 or deleting all evidence of that happening?

Availability

Decentralised services typically have higher availability than centralised, especially what is predicted for the EOS Main net. This means better protection against outages or government intervention.

Trust and Solvency

Centralised Exchanges assure us they are solvent but this isn't always the case, in 2013 Mt.Gox was the leading Bitcoin Exchange in the world processing 70% of all Bitcoins worldwide before 850,000 Bitcoins were lost, valued more than $450 million.

Decentralised Exchanges are able to prove their solvency and exactly where each asset is.

Freedom of market pairs

Some centralised Exchanges can charge thousands of dollars just to list a crypto asset. Decentralised Exchanges can offer this for a miniscule amount if not entirely free.

Neutrality

Decentralised Exchanges don't really care about who you are, they are neutral. They don't have to answer to a certain countries government for KYC documents, they don't create barriers to trade.

Fees

We can create decentralised Exchanges that are non profit, the only fee payable for using the service is purely technical costs. E.g. paying for RAM, bandwidth, CPU etc. Less fees mean more money for everyone!

Centralisation on a Decentralised Exchange

With all these benefits, we are more likely to achieve more people trading on fewer exchanges rather than the thousands we have today. This means less arbitrage and more liquidity!

| improve this answer | |
  • Nice answer. Maybe another advantage is that there are no additional transaction fees which will drive more people to use it. – TeeAttack42 Jun 9 '18 at 21:45
  • @TeeAttack42 cheers, I knew there was something stupid I missed. – John Williamson Jun 9 '18 at 22:48

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