min read

Tacen’s Analysis: CEXs will fade

Written by
Logan Smith
Published on
February 18, 2023

It’s been a few months since the last major cryptocurrency exchange collapsed, and as the dust settles people are left asking important questions.

How could this happen?

Did we miss warning signs?

Will this happen again?

The answer to that last question is a definite yes, at least as long as people continue to use the inherently flawed design of a centralized exchange (CEX).

The idea behind a CEX is quite simple: a trusted party executes trades for you – as long as you give them full custody of your digital assets beforehand. This is a similar model to what’s seen with stockbrokers, where an individual deposits money to use on that platform for making stock trades. It’s a model that works there, so why won’t it work in cryptocurrency, too?

There’s a few reasons why CEXs just don’t work. First, digital assets are easier to obfuscate, shift ownership, and be tucked away than stocks in a publicly traded company. In crypto, it’s all too easy to take digital assets from one wallet, swap it for another asset, run it through an anonymizer, and deposit it into a ghost wallet that nobody is watching – slipping out and blending in with everyone else.


Second, CEXs don’t work because they require trust and invasive user accounts. You can’t use a CEX without creating an account, forking over your personal information, and then trusting the exchange to take full control of your digital assets. As we saw with the quick change of the terms of service with Celsius, prior to its collapse, users can be blindsided by fine print and asterisks on promises when they thought they were in control.

That’s why CEXs are on the way out. There’s simply too many variables and risk factors for this to be sustainable.

What will take their place? We think hybrid decentralized exchanges (hDEX) are the obvious future of trading, which is why we’re building Tacen Exchange to be the world’s first functional hDEX. With the benefits of a CEX, and the safety of a DEX, we see hDEX as the next evolution in crypto trading.

We think you’ll agree once you experience it for yourself.

New to Tacen and wanting to learn what it’s all about? Be sure to follow us on Twitter to catch the latest updates and join our Discord community to meet the team and make friends. We love to give crypto to our community, and staying active on our Twitter and in our Discord server are the best ways to be the first in line.  

Welcome to Tacen – how crypto was meant to be.

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