There is no denying that both centralized exchanges (CEXs) and decentralized exchanges (DEXs) have contributed immensely to the growth of the crypto ecosystem.
However, the increased regulatory pressure from financial authorities and governments worldwide is hindering further expansion. With new regulations and policies regularly introduced, often with little to no warning, most CEXs and DEXs find it extremely difficult to operate in certain jurisdictions. Some leading centralized exchanges have already found themselves running afoul of country-specific regulations, from being directed to remove certain products and services to outright bans.
One of the biggest crypto exchanges, Binance, is first-hand experiencing the impacts of the stringent regulatory policies as the number of regulators sending notices to Binance continues to grow. The crypto exchange has most recently received notice from the Monetary Authority of Singapore (MAS) this month, forcing the platform to change its services. From September 10th onwards, Binance will cease offering “SGD trading pairs” and “SGD payment options” to remain compliant with local regulations.
As the crypto market continues to expand, the regulations will likely tighten even further. This reality is underlined by the recent speech from Gary Gensler, the new Chairman of the Securities and Exchange Commission (SEC). At the Aspen Security Forum, he compared the crypto ecosystem with the “Wild West” and has made it clear that the SEC will use its powers to the fullest to protect investors and ensure that exchanges aren’t falling between “regulatory cracks.”
The SEC Chairman also clarified that his agency has its eye on DeFi and is currently building an appropriate regulatory framework. Following these remarks, Uniswap, one of the largest decentralized exchanges (DEXs), is being questioned by the SEC.
Decentralized exchanges like Uniswap offer DeFi services – not just cryptocurrencies, but several other products like derivatives markets, futures contracts, and more. As a result, DEXs will soon fall under SEC purview and other country-specific regulations, making it difficult for users to enjoy the full extent of “decentralization.”
Decentralized Gateways To The Entire Crypto Market
The increased regulations facing both CEXs and DEXs have also impacted users. At present, registering an account on a centralized exchange platform has become a complicated and painfully lengthy process.
Users now need to undergo several KYC and AML verifications before getting started, which can take weeks. Moreover, signing up for a CEX account means giving away control of your funds to the service provider, which is a concern for many serious users. As a result, new entrants to the ecosystem find it difficult to start trading via centralized exchanges.
On the other hand, decentralized exchanges aren’t user-friendly. Users need a certain level of knowledge of blockchain technology to navigate their way through DEXs, making it a less preferable option for most users.
This is where decentralized aggregators come into the picture, saving users time while offering decentralized access to the entire crypto market. Orion Protocol is one such solution that provides users global and decentralized access to the whole crypto market. As the only platform to aggregate cross-section liquidity, Orion Protocol allows its users to seamlessly trade on Binance, KuCoin, and several other prominent exchanges without any geographical restriction.
Orion Protocol is one of the first-ever decentralized platforms that effectively aggregates every centralized exchange (CEX), decentralized exchange (DEX), and swap pool. Using its proprietary governance mechanism, Delegated Proof of Broker, Orion eliminates the need for users to create multiple accounts across marketplaces or undergo several KYC and AML verifications.
Rocket Vault is another promising platform that aims to redefine crypto value investing using Applied Artificial Intelligence (AI) and Machine Learning (ML). The team behind Rocket Vault is building RocketX, the first global liquidity aggregator that supports cross-chain swaps. The RocketX platform simplifies crypto trading by providing access to liquidity across CEXs and DEXs from a single interface, enabling users to trade from any wallet on any chain.
Amidst the tightening regulatory policies and the inherent problems with CEXs and DEXs, decentralized aggregator platforms like Orion Protocol and RocketX will not only allow users to retain complete control over their accounts but also lower crypto’s entry barriers by allowing users to access the entire crypto ecosystem at the click of a button.