By the year 2008, the world was excited about Bitcoin and what makes it so valuable. With time, salient cryptocurrencies such as Bitcoin made salient prominence. Alongside the crypto sphere transformed into a trading arena. The ever-increasing value of Bitcoin has the keen interest of the public. And this gave place to BTC and its price uproar. From 2012 onwards, altcoins and many other big blockchain projects gained momentum. Centralized exchanges were quite popular as well as decentralized protocols. With decentralization and slight regulation, we are now moving towards another big revolution. The trend for hybrid exchange is now in discussion and provides a safety net for the assets.
Cryptocurrencies are now trending and so are the major cryptocurrencies facing a backdrop. The downward trends are pinpointed by some socio-economic factors whereas the markets are facing a massive brunt. After the FTX fiasco, public trust towards major crypto centralized exchanges is now shifting. With basic and major trust issues related to centralized exchanges, a shift is certain and imminent. We can expect a certain rise in hybrid exchanges soon.
What is a Hybrid Exchange?
Centralized exchanges are now the big talk in town. The blue ocean strategy for restoring trust among the crypto community would be to make the shift towards hybrid exchange. While a common query in the cryptocurrency community is elementary. And hence requires simple answers with lucid clarification. With centralized exchanges, we can eradicate issues of anti-money laundering (AML) and add Know Your Customer (KYC) guidelines. But with this ease, the exchanges keep money in hot wallets that are connected to the internet. If hackers and spammers gain access to such an exchange, the problem gets worse. Crypto and money are constantly on the verge of stealth with people and their hot wallets.
A similar incident occurred in the past when money was stolen from exchanges like Poloneix, Mt. Gox, and Bitfloor. Funds such as those above are always exposed to vulnerabilities. To reduce the scam, one can also opt for decentralized exchanges. The decentralized exchanges are commonly referred to as swaps. With decentralized versions of swaps commonly called decentralized applications (DApps), one can swap their digital assets by attaching a wallet. With DApps you can expose yourself to the absence of AML and KYC-related risks. Hence, both entail risks and exposures depending on their type.
Now let us look at how the crypto hybrid exchange works and how users and traders can take advantage. With problems related to the AML and KYC a solicited solution is necessary. We see it coming from the hybrid model for crypto trading.
Making Terms with Hybrid Crypto Exchange
A hybrid crypto exchange eradicates the shortcomings of crypto exchanges and adds up the niceties of anonymity and full control. With the positives of decentralized exchanges, the hybrid crypto exchange gives autonomy and the safety of providing information about specific users. In hybrid crypto exchanges, you can invest in crypto by providing liquidity in the form of staking. While in HEX, you have complete
control over your assets and anonymity. You own your digital assets through the creation of smart contracts. Hence, hybrid crypto exchanges are a way to step forward toward the next hybrid exchange revolution. There are many popular hybrid exchanges that are at present contributing a lot. Some of them are Qurrex, Eidoo, Bitflex, and Legolas hybrid exchanges.
HEX vs CEX
Now as crypto exchanges are emerging there is a need for testing the waters. When we compare CEX to DEX, the former carries more advantages and features. In the centralized exchange, there are more advanced features for traders. Although the risks associated with copious amounts of funds are far bigger. With these dangers exposed, there is a greater likelihood of theft and hacks. Although the benefits for institutional investors are more attracted towards the CEXs. As CEXs provide immediate ramping off in local currency that is why CEX works best. Whereas some investors are keener to pay their taxes and many CEXs provide this advantage. Whereas in hybrid exchanges you can exercise full anonymity.
HEX vs DEX
In decentralized finance, there are more options to maintain a degree of anonymity and safe keep your assets. DEXs are modern shapes and forms for DeFi, and you can take opportunities to scale up your portfolio to the next level. DEX works more promptly when users do not trust centralized exchanges for their assets. You can partake in your assets such as yield farming and staking for specific returns. However, DEX is more expensive and takes longer to process transactions.