Decentralized Crypto Projects are on the Rise as Legal Enforcement Threatens Large Exchanges
According to statistics, the threat of enforcement becomes larger and larger as time goes by. This is especially troubling for popular crypto exchanges, and developers around the world have already recognized this issue some time ago. As a result, many projects, such as 0x, Kyber Network, and OmiseGo, have taken to building special new protocols that might be used for token trading.
It is these protocols that will allow the creation and monetization of decentralized exchanges. While DEXes are already a reality in the current space, they still leave much to be desired, and working on this issue is of great importance. Statistics from CryptoMiso also claim that 0x is the most lively project, as it has over 5,831 commits in the past year, especially in October.
These numbers are used for measuring the activity of individual projects, and they simply mark records of individual changes. Of course, commits alone provide no real insight, they only show that the projects are still active and alive.
Another website that monitors project activity is State of the dApps, which tracks changes and events on Github, THis includes various issues, code pushes, pull requests, and alike. And, here as well, 0x is the project with the most activity.
The vulnerability Of DEXes
As mentioned, there are many decentralized exchanges available even now. However, many of them are not truly decentralized, and elements of centralization can be found quite easy. For example, they depend on a central team of developers, specific web addresses, and alike. These elements were found necessary for a DEX to transfer tokens in an effective way.
However, these exchanges are still very vulnerable, which was proven recently after enforcement action was taken against Etherdelta. The SEC realized that it can still take action against trading platforms if there is a reason to believe that they are violating certain laws, such as the federal security law. They can even be targeted if they trade securities without being registered.
After the action was taken, numerous projects decided to issue compliance statements. The move served as proof of how DEXes can easily be closed, but more importantly, it showed that developers could be held reliable for coding on platforms that are suspected of conducting illegal activities — decentralized or not.
0x quickly stated that it is willing to change in order to be compliant with regulations. However, it also decided to deflect responsibility to those who are developing the platform, as decision-making will eventually be theirs.
How Open-Source Projects Grow
Despite everything, a large part of the crypto community still believes that DEXes are the key to future trading. They are believed to be a way to the new type of infrastructure — one that is free from authorities' interference. However, thanks to incidents like the one mentioned previously, it becomes apparent that anonymity will be the only way of achieving real freedom. Either that or a new way to share responsibility as a collective will be invented.
0x is open-source, just like Kyber Network and OmiseGo. This means that their codebases can be accessed on GitHub by pretty much anyone. Not only that, but people also receive tools and guidance that allows them to create new products by themselves. Such products can be delivered in their raw form, and then refined into a useful tool after the community gives feedback.
Many developer teams are collaborating on different projects in order to speed up their development and delivery. Projects such as Ethfinex, Radar Relay, The Ocean, and many others, for example, all run on 0x protocol. Kyber Network has a P2P exchange called WeSwap. With that in mind, it is understandable why projects have so many commits. Numerous developers are free to participate in any way they see fit, which is what eventually leads to 1,137 commits from 34 contributors, as it was noticed in 0x's stats for the last three months.
With continuous development, these projects might eventually become a real competition to centralized ones. Making them fully developed and functional might also solve the issue of delisting tokens, with so many of them being rejected by the exchanges in fear of the SEC.