Tacen 101 – What is an hDEX, and why is it so important?

There’s a lot of confusion surrounding cryptocurrency, but the basic idea behind crypto is fairly simple: currency should be decentralized, transactions should be independent of central control, and people should have actual possession of their money.

When you keep those core ideas in mind, it’s easy to see how it’s so different from traditional finance. It’s also easy to see how the crypto industry, as a whole, has veered far off course. For example, most people who are new to cryptocurrency usually start their journey by using a centralized exchange (CEX) - where they deposit their crypto and use it as a sort of bank account that they can make trades from.  

But unlike traditional bank accounts, your cryptocurrency can be stolen, hacked, or otherwise lost without warning, and without FDIC insurance to make you whole again. For all of the conveniences that CEXs offer, there are substantial risks associated with them, too. Just think back to the recent meltdowns of Celsius or FTX to see how bad it can be when a once-trusted CEX loses your money.

That’s where Tacen Exchange comes in. Our idea is very simple: let you make trades, but keep you in control of your own money at all times. That means you gain the conveniences of a centralized exchange (CEX), while maintaining the security and safety nets of a decentralized exchange (DEX). We call this idea a hybrid decentralized exchange (hDEX), and we’re the first project in the world to make it a reality.

That’s the idea behind Tacen Exchange. Here’s how it works:

Unlike with what happens at a CEX, on Tacen Exchange you never actually need to login to make a trade. After all, we aren’t taking custody of your funds, so why force you to create some sort of account with us? Instead, we simply require that every action you take go through a wallet that you control. In this way, you always stay in control of your funds, and you verify your ownership of those funds at each step of the way. It’s all done automatically, quickly, and without the need for centralized approval.

To use Tacen Exchange, you’ll just visit the exchange site, connect your wallet, and decide what you want to do next. If it’s your first time on the exchange, you’ll probably start my depositing some crypto into a custody contract. It’s worth emphasizing that this is simply a custody contract – it's not putting your crypto into our possession. Rather, you’re just setting the cryptocurrency aside – still in your wallet – to be used for certain actions on Tacen Exchange. You can always back out of that custody contract at any time.

When crypto is set aside in a custody contract on Tacen Exchange, it’s ready to be used to make trades. Let’s say Person A and Person B set aside crypto to be used for trading – Person A has put some ETH into a custody contract, and Person B has set aside some TXA for trading. Person A wants to exchange their ETH for TXA, and Person B wants to exchange their TXA for ETH. They each place an order on Tacen Exchange, and the exchange does the backend work of figuring out who wants what for how much. Once the orders are matched, they are automatically executed, with the funds moving out of the respective custody contracts and being exchanged in moments.

It’s hard to overstate the importance of staying in control of your crypto while trading. At Tacen, we believe that the best defense is to simply never expose our users to risks in the first place, which is why we never take custody of your crypto. In this way, we ensure there is never a risk of centralized systematic fraud or error like you see in other exchanges.

Tacen Exchange is currently in its Open Alpha phase, which means you can experiment with the exchange interfaces and learn how it works without using your own cryptocurrency. Ready to get started? Visit our step-by-step guide here to get yourself set up in moments, it’s easier than you think.

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.

‍