WEB2 Put in a WEB3 Skin, Is Not Decentralization, It’s a Mirage
After the FTX — Cryptocurrency Derivatives Exchange catastrophe last week, and the bizarre tweets SBF has been putting out, it’s clear that we need decentralization in Web3 more than ever. Creating centralization in Web3 doesn’t address the problems Web3 was destined to solve. It just repackages them in a new skin.
Web3 is still the best path forward for humanity
The most unfortunate thing about the @SBF_FTX and @FTX_Official debacle is their impact on crypto adoption. However, even with the immense magnitude of damage caused by this ever-evolving debacle, web3 remains the best candidate for a decentralized citizen-powered future.
Stop pretending to be decentralized when you are not
In fact, the entire SBF situation proves this. Think about it.
What was @FTX_Official? A Centralized Exchange.
Inherently an implementation that required users, investors, and anyone involved to put their trust in the hands of a centralized entity.
This is not the trustless decentralized world web3 promised. As Kyle Chasse mentioned in the space hosted by Mario Nawfal yesterday, this was another example of a web2 app dressed in web3 clothing.
Is any web2 reliance bad for web3 apps?
Now, I am not saying any web2 app utilizing some aspects of web3 is bad. In fact, among the large number of decentralized implementations launched by Ferrum Network, we have also launched a few centralized solutions that were applicable and requested by the stakeholders.
CEXs are no different, clearly, there is a use case for them, they can provide customer care, support, and, at-least we thought, a guarantee that funds are #SAFU But is there a better way forward? I believe there is. ✔️
Wen decentralized order book ser?
To this day, we haven’t asked ourselves why we don’t have significant adoption of a decentralized order book. Project Serum has made some headway in this area, but is it enough?
Why are CEXs so popular?
To better understand why #CEXs exist and are so popular in the world of decentralized solutions, we need to ask why do choose people to use a #CEX over #DEXs and other decentralized solutions.
Any guesses?
I’ve deduced this down to the following reasons:
People use #CEXs
- As a #FIAT <> #Crypto on-ramp and or off-ramp.
- To enjoy #gasless #trades and or lower #fees
- To take advantage of a relatively more predictable #order book
Let’s #DeFi these 3 use cases 👇
FIAT ← → Crypto on-ramp and or off-ramp?
Companies like Wyre, MoonPay, Coinbase Commerce, Flourishing Capital, and others have already begun to solve this problem.
Gasless trades and or lower #fees?
DEXs like Dfyn Network from Router Protocol, among others, have attempted to solve this by subsidizing or rewarding users with fees earned in their own tokens.
However, this is not the same as an API call on a #CEX updating records in their database for settlement later upon withdrawal. AKA not truly #gasless.
So how do we enable gasless trades in DeFi?
That’s the billion-dollar question that could change the shape of an entire industry and help empower billions of people with access to decentralized finance.
Could this be solved with zkSync by Matter Labs? Will #zkSnarks and off-chain #zkRollups play a significant role here?
The same solution could be applied to an order book. Perhaps utilizing IPFS.
Ferrum Network’s Contribution to Decentralization
What’s the most exciting part? You can build all of this on any chain utilizing Ferrum Network’s Quantum Portal and secured by pioneering solutions like Value Constrained Pos Rollups (VCPR) invented by Ferrum founder Naiem Yeganeh.
Our team at Ferrum Network is constantly building to make web3 more accessible to the masses. We monitor, assess, & learn from the developments in the industry, then build solutions that solve those exact problems.
Do you have an idea about how CeFi can be more decentralized? Drop us a line on our Twitter.
Stay tuned!
Very truly yours,
The Ferrum Network Team
About Ferrum Network
Ferrum is ushering in the era of blockchain interoperability 2.0. Powered by a multichain messaging engine known as Quantum Portal, Ferrum Network’s mainnet will bring value, data, and functional interoperability to every chain in the industry.
Utilize Ferrum Network to build and deploy solutions on one network and instantly enable multichain functionality without the burden or technical debt that comes with managing a multichain infrastructure.
