Decentralized Exchanges: Why do they lack liquidity?

[statdude]

Agree main issue is slow trading and lack of BOT development for decentralized exchanges.

Even bitshares exchange is 3 second blocks and lack of good API makes this difficult (with some exceptions) to BOT on currently. Bitshares is probably doing the best out there currently. 3 second blocks could work, but anything waiting 1 hour for trades like XCP for btc confirms is totally hopeless.

One day hopefully there is a decentralized exchange with millisecond trading. Maybe via lightning.

[Abiky]

Agree main issue is slow trading and lack of BOT development for decentralized exchanges.

Even bitshares exchange is 3 second blocks and lack of good API makes this difficult (with some exceptions) to BOT on currently. Bitshares is probably doing the best out there currently. 3 second blocks could work, but anything waiting 1 hour for trades like XCP for btc confirms is totally hopeless.

One day hopefully there is a decentralized exchange with millisecond trading. Maybe via lightning.

Yeah. I've noticed the difference of speed between centralized and decentralized exchanges. So far, with the speed and ease of use of centralized exchanges, people tend to use it more for their daily trades.

However, with the inherent flaws of centralized exchanges like hacks and loss of funds, people may switch to decentralized solutions when they become improved in the future. One thing for sure, is that decentralized exchanges open up a pathway towards the ability of trading any asset without middlemen, providing many benefits that outweights those of centralized ones.

Therefore, with the integration of Lightning Network and other improvements to come along for decentralized exchanges, they will become the future of trading safe from hacks, and theft, giving power to the people once more. Just my thoughts

[左]

Agree main issue is slow trading and lack of BOT development for decentralized exchanges.

Even bitshares exchange is 3 second blocks and lack of good API makes this difficult (with some exceptions) to BOT on currently. Bitshares is probably doing the best out there currently. 3 second blocks could work, but anything waiting 1 hour for trades like XCP for btc confirms is totally hopeless.

One day hopefully there is a decentralized exchange with millisecond trading. Maybe via lightning.

Yeah. I've noticed the difference of speed between centralized and decentralized exchanges. So far, with the speed and ease of use of centralized exchanges, people tend to use it more for their daily trades.

However, with the inherent flaws of centralized exchanges like hacks and loss of funds, people may switch to decentralized solutions when they become improved in the future. One thing for sure, is that decentralized exchanges open up a pathway towards the ability of trading any asset without middlemen, providing many benefits that outweights those of centralized ones.

Therefore, with the integration of Lightning Network and other improvements to come along for decentralized exchanges, they will become the future of trading safe from hacks, and theft, giving power to the people once more. Just my thoughts

I think at some point we will all be using decentralized exchanges, and it's going to be for the better.

[Abiky]

I think at some point we will all be using decentralized exchanges, and it's going to be for the better.

Agree. There has been a series of hacks over the course of Bitcoin's history which makes people think twice before depositing their coins into a centralized exchange. In this sense, I think that soon people will migrate to decentralized exchanges as they provide greater security and availability than centralized solutions.

A decentralized exchange has no single point of failure, and it's available 24/7. With the lack of a central operator, the risk of losing your funds is very minimal. Therefore, as more hacks and security risks occur within regulated, centralized exchanges, people will eventually switch to decentralized exchanges and increase their liquidity.

Right now, there are many good decentralized exchanges available like BitShares DEX, 0x Exchange, OpenANX, and even EtherDelta. The benefits of these exchanges are greater than those provided by centralized solutions, making them quite attractive among many crypto-enthusiasts like me. Just my thoughts

[lofegs]

Because of speed and not as user friednly as centralized ones. But many working on both and new liqudity methods.

[vv181]

I think at some point we will all be using decentralized exchanges, and it's going to be for the better.

Agree. There has been a series of hacks over the course of Bitcoin's history which makes people think twice before depositing their coins into a centralized exchange. In this sense, I think that soon people will migrate to decentralized exchanges as they provide greater security and availability than centralized solutions.

A decentralized exchange has no single point of failure, and it's available 24/7. With the lack of a central operator, the risk of losing your funds is very minimal. Therefore, as more hacks and security risks occur within regulated, centralized exchanges, people will eventually switch to decentralized exchanges and increase their liquidity.

Right now, there are many good decentralized exchanges available like BitShares DEX, 0x Exchange, OpenANX, and even EtherDelta. The benefits of these exchanges are greater than those provided by centralized solutions, making them quite attractive among many crypto-enthusiasts like me. Just my thoughts

There many exchanges that got hacked not just one or two and the amount of money being lost is tremendous. I don't know why people still rely on a centralized exchange, they make themselves prone to be hacked, and the support center is shit, many people wait over a month for a simple solution.

The decentralized exchange also had many benefits in the technical aspect, I mean its really fit with cryptocurrencies scene, where privacy and anonymity is essential.

[Abiky]

There many exchanges that got hacked not just one or two and the amount of money being lost is tremendous. I don't know why people still rely on a centralized exchange, they make themselves prone to be hacked, and the support center is shit, many people wait over a month for a simple solution.

The decentralized exchange also had many benefits in the technical aspect, I mean its really fit with cryptocurrencies scene, where privacy and anonymity is essential.

Agree. Centralized exchanges have many flaws inherent within them, which makes it unpractical to trade cryptocurrencies there. They often become hacked, and their customer service takes months to solve your issues. (like Coinbase and Bittrex support) Given the huge amount of money that have been lost over the past years on centralized cryptocurrency exchanges, I think that people will begin to look out for decentralized solutions that would keep their coins safe from theft and hacks.

With decentralized exchanges, we would never have to worry about the exchange operator running with your coins or getting your coins robbed since they operate autonomously and distributed among many computers. There is no single point of failure, and people could trade cryptocurrencies freely.

Until today, there are many people which still rely on centralized exchanges probably because of regulatory compliance. But, I believe that as more security threats occur on these traditional solutions, people will begin using more decentralized exchanges than centralized ones. Once this becomes a reality, then we could expect to see more liquidity in decentralized exchanges to make cryptocurrency trading practical in them.

Most recently, EtherDelta has gained a lot of popularity, and others like Bitshares DEX, OpenANX, and 0x exchange will begin to follow. The future lies with decentralized, autonomous trading of cryptocurrencies with no middlemen or third-party involved. Just my opinion

[spring07]

The few Decentralized exchanges i have tried my hands on are not easy to walk around.
This has a way of discouraging would-be users or investors.

[cryptopuma]

Because decentralized exchanges arent not so easy to use like bittrex,binance,and poloniex.

[LendingPlatforms]

Don't forget WAVES, a sleeping giant...

They updated their DEX and try the new one (on next link by selecting "online client beta"...) :

https://wavesplatform.com/

They will update the client as well in the near future...

At least a coin with a good working product, sure 2018 will be the year of Decentralized Exchanges...

[lofegs]

Don't forget WAVES, a sleeping giant...

They updated their DEX and try the new one (on next link by selecting "online client beta"...) :

https://wavesplatform.com/

They will update the client as well in the near future...

At least a coin with a good working product, sure 2018 will be the year of Decentralized Exchanges...

Yeah as compare with the other Waves' DEX is good with it's speed and interface. But there is not much of liquidity.

[Abiky]

Don't forget WAVES, a sleeping giant...

They updated their DEX and try the new one (on next link by selecting "online client beta"...) :

https://wavesplatform.com/

They will update the client as well in the near future...

At least a coin with a good working product, sure 2018 will be the year of Decentralized Exchanges...

Yes. Waves also implements a decentralized exchange that allows anyone to trade tokens or coins freely without the middlemen. It makes a great addition among other decentralized exchanges in existence such as EtherDelta, OpenANX, and BitShares DEX. Thus, the more decentralized exchanges emerge, the more options people will have towards making the switch from traditional exchanges.

I believe that as more hacks occur in centralized solutions, people would have no choice but to begin using decentralized exchanges. They are much more secure, free from third party interference, and faster. All they need is liquidity, and they could make strides in the mainstream world.

In the future, centralized exchanges will become outdated as decentralized ones take the lead. The competition would become fierce as new DEX emerge, but only those which could deliver the most liquidity will prevail. Just my thoughts

[choochimil]

My experience with Etherdelta is trades are frustratingly slow and ethereum network fees are high. There is a fee to deposit funds. There is a fee to place and order. There is a fee to make a trade. There is a fee to withdraw funds. To even get a transaction through in an hour you need to up the gwei and gas limit. I think the key to decentralized exchanges is the speed/fees of the underlying blockchain. Ehtereum is not able to handle the speed needed just yet.

[Abiky]

My experience with Etherdelta is trades are frustratingly slow and ethereum network fees are high. There is a fee to deposit funds. There is a fee to place and order. There is a fee to make a trade. There is a fee to withdraw funds. To even get a transaction through in an hour you need to up the gwei and gas limit. I think the key to decentralized exchanges is the speed/fees of the underlying blockchain. Ehtereum is not able to handle the speed needed just yet.

Exactly. That's the point with Ethereum and other smart contract platforms. Their slow speed and transaction capacity make them unable to handle mainstream applications such as decentralized exchanges. Maybe that is the reason people have been using more centralized exchanges than decentralized ones.

However, I believe that all of this will end especially in Ethereum, as it upgrades its protocol towards PoS and adopts the Plasma Framework. It will become a huge boost to smart contracts, and decentralized exchanges like EtherDelta will benefit from that. One this becomes a reality, then there could exist a huge potential for EtherDelta to become a true rival against centralized exchanges.

Nevertheless, the value proposition of decentralized exchanges would be security, low cost of fees, and lack of middlemen. It greatly surpasses the benefits provided by centralized exchanges, and I believe that people will make the switch soon as they realize the true potential that decentralized exchanges provide. Just my opinion

[boltz]

Very good question here and I see alot of good answers already. I think the same and time will speak again for sure that as some point a new exchange will get hacked and for there this time people will understand that we need to step away from centralized exchanges and step into the decentralized ones because only like this we can trade with privacy.

[GayOfThrones]

Decentralized exchanges lack liquidity because of the technical nature that they have - the coins are decentralized, in their owners' wallets, and so the move slow. Moreover, many people use trading actually for gambling, and this works better in centralized exchanges, so volumes are bigger there.

[ulhaq]

Decentralized exchanges lack liquidity because of the technical nature that they have - the coins are decentralized, in their owners' wallets, and so the move slow. Moreover, many people use trading actually for gambling, and this works better in centralized exchanges, so volumes are bigger there.

If this is the case, maybe we will only get high liquidity once the lightning network and cross-chain atomic swaps are implemented, since the limiting factors are transactions and fees. However, a centralized exchange will always be able to provide lower fees since they do trades internally.

There will also be some workarounds. I read about a company using ethereum smart contracts to create simulated portfolios that hold the coins one wants, but not in reality so it is safe, and then the company will do some exchanges on the back end to give everyone their return. The ether that maintains the portfolio is in a smart contract, so not held on a centralized exchange.

[wuclx]

Which decentralized exchange has the biggest trading volume at the moment? I tried Bisq yet. Are there other usable alternatives?

[Abiky]

Very good question here and I see alot of good answers already. I think the same and time will speak again for sure that as some point a new exchange will get hacked and for there this time people will understand that we need to step away from centralized exchanges and step into the decentralized ones because only like this we can trade with privacy.

Yes. As more centralized exchanges become hacked over the course of time, people will have no choice but to adopt decentralized solutions. It has become evident that centralized exchanges are vulnerable to hacks, theft, and even government regulations. Thus, shifting trades to decentralized exchanges would make it much more difficult for hackers to perform an attack (since there is no single point of failure), as well as the implementation of government regulations (in the case of China trying to stop cryptocurrency trades).

It will only become a matter of time before decentralized exchange become improved over time in terms of speed, liquidity, and efficiency to overcome centralized exchanges. The whole purpose of cryptocurrencies is the decentralization of finance, and what better way to do so by decentralizing trades in the mainstream world? Therefore, in the future, I believe that decentralized exchanges will become dominant in crypto land. Just my opinion