INNODEX, an upcoming decentralized exchange (DEX) from NvirWorld, plans to take on Binance, a centralized exchange and the largest ramp by trading volume, and Uniswap, a DEX on, among other blockchains, Ethereum.
In November 2022, the price of Bitcoin fell from around $20,000 on November 5 to $15,000 in five days. Despite pullbacks in subsequent sessions, prices did not break above $20,000 until January 14, 2023.
Despite the challenges, cryptocurrencies remain popular with more people willing to trade and buy digital assets through centralized and decentralized platforms.
What drives trading activity on decentralized exchanges?
Chainalysis, an analytics platform, recently reported that in the first half of 2021, centralized exchanges (CEXs) were responsible for more than 90% of all cryptocurrency transactions.
However, DEXs have been gaining popularity, with on-chain transaction volumes reaching $224 billion compared to just $175 billion for centralized options between April 2021 and April 2022. Forbes data shows that Trading volume for decentralized exchanges (DEXs) increased by 79% since October. to November 2022, reaching 91,000 million dollars.
This trend can be attributed to concerns expressed by users about the security and transparency of centralized exchanges, such as FTX and Celsius, where the use of client assets is not transparent enough.
Users are increasingly opting for decentralized alternatives that offer more security and transparency by allowing them to trade without relinquishing control of their private keys. However, DEXs have drawbacks, including gas fees on each transaction and limited transaction services.
INNODEX is a hybrid decentralized exchange that aims to solve the challenges faced by both centralized and decentralized on-ramps. By combining its advantages and compensating for its weaknesses, INNODEX could be a game changer in the competitive cryptocurrency exchange market.
Binance is the largest exchange by trading volume
While DEXs are gaining ground, Binance is popular with cryptocurrency traders. According to CoinMarketCap, Binance’s trading volume exceeded $15 billion in the last 24 hours, outpacing competing exchanges like Coinbase and Kraken.
Binance’s interface, trading tools, and trading pairs make it more accessible to newcomers and give traders more options to diversify their portfolios.
Furthermore, after all the bank run issues that occurred last year, Binance also implemented measures to ensure the safety of its users’ funds. For example, Binance conducts regular “Proof of Reserves” audits to prove that it has enough reserves to cover all user balances. The reputation of the exchange and its security measures have helped it maintain its dominance in the centralized exchange market despite the rise of decentralized exchanges.
Even so, CEXs also have several drawbacks that help drive demand for decentralized platforms like Uniswap. One of the main concerns plaguing centralized platforms is the need for greater transparency and the demand for greater asset security. Recent reports from Binance’s reserve test revealed that the exchange’s debt exceeds its assets, raising questions about the true status of client funds.
By contrast, DEXs provide a more transparent and secure alternative by allowing users to trade without relinquishing control of their private keys. Additionally, having assets spread across multiple addresses on a DEX makes it less susceptible to computer and cyber attacks. While CEXs can offer convenience and liquidity, they are also more vulnerable to government regulation and censorship. These drawbacks encourage the creation of hybrid exchanges like INNODEX.
Exploring Uniswap and DEX
Uniswap, dYdX, PancakeSwap, SushiSwap, ApolloX, and other decentralized exchanges (DEXs) have recently gained significant attention in crypto. This growing popularity is due to the numerous benefits that DEXs offer.
One of the most significant advantages of DEXs is their transparency, which allows users to store and control their funds directly in their wallets without third party intervention. This eliminates concerns about withdrawal restrictions or infringement of asset management rights caused by CEXs. DEXs also offer better security, as assets are stored in each individual’s wallet, even during a hack.
However, DEXs have their limitations. As they operate on blockchain technology, each transaction is recorded on the blockchain and users have to pay gas fees for each transaction. This is also the biggest disadvantage of DEXs compared to centralized options. Additionally, the liquidity of DEXs can be less than that of exchanges such as Binance and Coinbase due to the additional gas fees they levy on users, resulting in wider bid-ask spreads and higher price volatility. The DEX interface can also be complex for new users.
Despite these drawbacks, Uniswap and others continue to gain popularity, with users prioritizing decentralization and transparency over convenience and liquidity.
INNODEX is a hybrid and decentralized DEX
INNODEX offers a solution to the inherent problem of gas fees in decentralized trading by allowing people to store and trade assets in their wallets while transparently recording their asset holdings on the blockchain.
The platform uses a hybrid approach and allows users to use their wallets, such as Metamask, without complex KYC processes. In addition, INNODEX offers multi-chain trading services for Ethereum and Solana, allowing users to transparently verify their assets on EtherScan or SolScan.
Specifically, INNODEX offers an advantage in gas rates. Instead of charging users for each transaction, INNODEX charges gas fees on a daily basis when assets are in sync with the blockchain. This makes the platform attractive to active traders. Additionally, the Hybrid DEX uses an order book, providing a variety of order types such as market orders, making it more accessible to users familiar with centralized exchanges.
The INNODEX engine is based on NvirWorld’s proprietary “Stay Pending” blockchain technology. Collects transaction data on-chain and logs it in bulk to reduce gas fees and maximize convenience. This allows the exchange to provide various trading services, such as centralized exchanges, while ensuring high liquidity.
Additionally, NvirWorld has been developing and providing various proprietary technologies to commercialize blockchain technology. The company signed an agreement with Solana and officially partnered with ConsenSys.
Can INNODEX gain market share?
Since each exchange has distinct advantages and disadvantages, users have historically had to make decisions based on their priorities and needs. INNODEX combines the best centralized and decentralized exchanges, giving users a new option that meets all their needs and wants.
This new development could bring about a change in the perception of traditional exchanges and even establish the platform as a leader in crypto.
INNODEX is in its fourth closed beta test and will launch in Q1 2023.
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