The DEX Dilemma

Decentralized exchanges promised a solution: trade without trust, keep your keys, maintain control. Yet adoption remains limited. Despite the clear need for trustless trading, DEXs handle just 10% of crypto volume. The reason? They solve the trust problem by sacrificing everything else.

Speed becomes the first casualty. Every trade must be verified by the blockchain, creating inherent latency that makes professional trading impossible. Liquidity fragments across multiple DEXs and chains, forcing traders to accept higher slippage or manage complex cross-chain movements. Gas fees turn basic operations into expensive gambles during network congestion.

First-generation hybrid exchanges attempted to bridge this gap, but introduced compromises that undermined their purpose. They moved order books off-chain without proper validation, essentially asking users to trust their centralized components blindly. The result: solutions that were neither fully trustless nor particularly fast, inheriting the weaknesses of both models without capturing their strengths.