There has been a lot of hype about decentralized exchanges. While most are not up to speed in terms of the promised benefits, EtherDelta seems to be one of the few that is delivering. It is intuitive and easy to use with no KYC procedures. It also runs on open source code.
What is EtherDelta?
EtherDelta is operated by the EtherBoost team and managed by Zack Coburn and Tina Trinh. But the code that runs the decentralized exchange is 100% deterministic and open source. The exchange website is compiled by the code, and users do not need to have any faith in Coburn or Trinh, though they are publicly available for questions about the decentralized exchange. EtherDelta is an ETH-based platform.
The SEC has recently fined Zach Coburn for operating a decentralized exchange. Though the exchange is decentralized and does not require any individuals for its operations (in contrast with centralized exchanges), the SEC has declared that the code writers are responsible for the code and that EtherDelta failed to register with the SEC for the transaction of securities. While many have declared this position to be illegitimate, it is quite reasonable. Code writers should be responsible for the code they write. Whether such tokens should be deemed securities is another matter entirely.
In any case, if the decentralized exchange were hosted anonymously, then the SEC would have nobody to fine. While the SEC could go after the website itself, this could prove resource intensive if decentralized exchanges proliferate. Coburn is said to have been “cooperative” in the payment of the fine.
EtherDelta has few rivals in terms of decentralized exchanges, which are thus far underdeveloped. IDEX and OpenLedger DEX are among the most noteworthy competitors as decentralized exchanges. Question marks remain over whether Bancor is decentralized or not.
However, EtherDelta does have some centralized counterparts which could take a large slice of market share. EQIBank is the world’s first licensed and regulated bank for both fiat and crypto, offering cryptocurrency custody, cryptocurrency-based loans, and cryptocurrency wallets. They also offer traditional fiat services and a built-in cryptocurrency exchange, which represents a complete package in terms of traditional and modern finance.
ETERBASE is another centralized exchange that is seeking full regulatory compliance in Europe, completely integrating cryptocurrency as a legitimate asset within their infrastructure. These types of regulated and centralized exchanges are likely to attract large institutions as opposed to their smaller and decentralized counterparts, where regulation is to be avoided as opposed to integrated. There is still hope that as the industry evolves, it can become self-regulating, and Japan has already allowed this to happen to a degree.
Digital Nomad with an interest in Zen and Blockchain technology.
Law graduate with 3 years experience as a consultant in the capital markets industry and 4 years experience freelancing on UpWork as a Creative Writer.