🐞Existing Problems in DeFi

Centralized Exchanges (CEX) have faced frequent catastrophic events, driving a pressing demand for secure and convenient Decentralized Exchanges (DEX). Currently, DEX solutions like Uniswap and DYDX have given people hope for revolution. However, CEX still maintains a high moat due to its first-mover advantage and centralized platform efficiency, forcing many users to risk dealing with malicious central institutions in exchange for speedy trading.

The inability of DEXs, represented by Uniswap, to revolutionize the previous generation of the DeFi industry has profound reasons:

Firstly, the inherent competitive advantages of CEXs, such as user accumulation and convenience, are not something DEXs can surpass in a short period. This is a direct reason.

Secondly, the issue of cross-chain transactions. Due to the existence of different blockchain systems like ETH (EVM compatible), Cosmos, Polkadot, etc., the cross-chain transfer of assets faces challenges of high costs and lack of convenience.

Thirdly, security issues. DEXs, operating through smart contracts, are prone to various vulnerabilities and security risks that may be exploited by malicious attacks.