Hybrid cryptocurrency exchanges: what is HEX?
Cryptocurrency traders are used to working with two types of exchanges: centralized and decentralized. However, progress does not stand still, and soon there will be exchanges that combine elements of both predecessors - HEX. In this article, we will consider the disadvantages of the two current types of exchanges, and talk about the advantages of HEX.
- CENTRALIZED EXCHANGES (CEX)
The most popular type of exchanges to date. They include such companies as Binance, Coinbase, etc. Their main problem is security, because the control of all processes is in the hands of one company. This makes centralized exchanges a favorite target for hackers, and they are too good at stealing customers' money.
- DECENTRALIZED EXCHANGES (DEX)
This category of exchanges does not depend on individual organizations or individuals, but are controlled by the users themselves, which makes the work of hackers much more difficult. The main disadvantage of such exchanges is the lack of technical ability to offer clients such functionality as latency or liquidity tools. And that is what can encourage institutional investors to come to the market.
- HYBRID EXCHANGES (HEX)
The task is not an easy one even in theory, but in practice it is even more difficult: there is not a single working site of this kind at the moment. Nevertheless, several companies are actively working on their creation.
- HYBRID EXCHANGES OF THE FUTURE
One of the HEXs under development is the Legolas Exchange, which will provide a semi-differentiated order negotiation protocol. All customer orders first go through a centralized order pool before being stored in a blockchain. This system is designed to increase the bandwidth of the site while maintaining decentralized security.
Another upcoming hybrid exchange is Qurrex, which intends to provide a colossal throughput of 70000 transactions per second. The company is very serious and wants to be as open as possible to the users, and therefore the latter will be provided with quarterly reports, reports on the activities of the system from the independent commission, audits conducted by the world's largest accounting firms, etc. The representatives of the exchange themselves expect that in 2020 their product will be a direct competitor to CEX.
There are some more companies developing hybrid exchanges, which have some features, but the essence they have the same - to provide users with a platform with the security of decentralized exchanges and functionality of centralized. There is no such project on the market yet, so it is too early to make conclusions about the future of this direction. We will follow the pioneers of HEX.
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