The news of the failure of Italian crypto exchange The Rock Trading is the talk of the town. After 10 years of use, the centralized exchange has failed and many users are seeking shelter in decentralized exchanges.
In the article we are going to analyze its failure in detail and, in addition, suggest viable alternatives.
The failure of The Rock Trading will lead users to decentralized exchanges
The Rock Trading was a popular centralized Italian exchange. It was known for its low trading fees and wide selection of digital assets. However, recently, the exchange suffered a catastrophic failure that led to significant losses for its users.
According to reports, the failure was caused by a technical problem affecting the exchange’s hot wallet. The hot wallet is the part of the infrastructure used to store funds that are readily available for trading.
Because of the glitch, many users were unable to access their funds and some even reported that their balances had been completely wiped out.
The Rock Trading initially denied any problems, stating that its systems were functioning normally.
However, as more and more users reported problems, the company was forced to acknowledge the glitch. In a statement, the exchange admitted to a serious problem and promised to reimburse affected customers.
The situation has raised serious concerns about the security and reliability of cryptocurrency exchanges. While digital assets can offer many benefits, they also present significant risks, especially when held on centralized platforms.
The failure of The Rock Trading highlighted the importance of proper risk management measures and the need for robust security protocols in the industry.
The incident also served as a reminder to users that they must exercise caution and diligence when choosing and using cryptocurrency exchanges.
Although many platforms offer attractive features and low fees, users must research each exchange carefully to ensure they are using a reputable and reliable provider.
The failure of The Rock Trading was a wake-up call for the cryptocurrency industry. It underscored the need for greater transparency and accountability, as well as the importance of developing more secure and resilient systems to protect users’ funds.
The best decentralized exchanges to rely on after the failure of The Rock Trading
As the cryptocurrency world continues to expand and evolve, more and more traders are turning to decentralized exchanges to buy and sell digital assets.
Unlike centralized exchanges, which are controlled by a single entity, decentralized exchanges are built on blockchain technology, which means they are open source, transparent, and based on a trustless system.
This allows users to exchange cryptocurrencies without the need for an intermediary, reducing the risk of fraud or theft. But with so many decentralized exchanges now available, it can be difficult to know which one to choose.
We will share the best decentralized exchanges, examining the main features and advantages of each, so that you can make an informed decision on which one is right for you.
dYdX
dYdX is the leading decentralized exchange (DEX), and its founder is Antonio Juliano, a former engineer at Uber and Coinbase. The DEX platform was launched in 2017, and spot trading and margin trading have also been integrated over time.
But the main function of dYdX is to offer perpetual trading service, which is mainly a function offered by centralized exchange (CEX) platforms.
dYdX allows users to exchange peer-to-peer perpetual contracts and to hold positions until the time of their satisfaction.
dYdX does not charge any deposit or withdrawal fees, and no gas fees are charged when trading on layer 2.
However, the protocol employs a maker-taker commission structure that determines trading fees based on volume.
The dYdX platform operates through StarkNet, a layer-2 for Ethereum that uses technology from ZK-Rollups. With StarkNet, dYdX enables its users to make gas-free, fast and virtually instantaneous trades on the platform, all without sacrificing interoperability with Ethereum and its entire ecosystem.
In addition, using StarkNet you can have access to the StarkEx trading engine, which allows dYdX to run on a mixed system.
Undoubtedly dYdX is one of the best decentralized exchanges to use, and it is no coincidence that it is ranked number one on CoinMarketCap’s DEX rankings.
UniSwap V3
This is another of the top decentralized exchanges (DEX) in the industry. A project consisting of a set of smart contracts running on the Ethereum blockchain.
UniSwap focuses on providing a portion of transaction fees and UNI tokens to incentivize users to maintain their liquidity.
The goal of the creators of UniSwap v3 is to create an exchange that would in effect resemble a traditional exchange (CEX), but with the advantages of decentralization.
With contracts built into its protocol, Uniswap is able to allow users to trade without intermediaries, achieving a high level of both decentralization and resistance to censorship.
Uniswap abandons the traditional architecture of centralized, digital exchanges, making the order book a thing of the past.
One of the most unique things about Uniswap is the fact that the project itself receives no revenue.
Since Uniswap is a decentralized protocol and its users provide all the liquidity for the platform, all fees go directly to the liquidity providers.
UniSwap v3 is one of the most important exchange revolutions; its design moves away from the idea of centralization, but at the same time maintains the ease of use of a regular exchange.
Kine Protocol
Kine Protocol is a decentralized exchange launched in March 2021. Founded by Lei Wang, a former investment banker and former head of Huobi’s institutional business unit.
Kine Protocol’s decentralized exchange, provides a peer-to-pool derivative market in which a liquidity pool acts as a passive counterparty for perpetual contract traders.
Among the most important functions of Kine Protocol is undoubtedly leverage of up to 100x with cross margin, guaranteed liquidity, and also allows Ethereum, BNB Chain, Polygon, and Avalanche to be placed as collateral.
From here it can be deduced that users of Kine Protocol, have the option to decide whether to participate in the ecosystem as stakers, traders or liquidators.
Regarding commissions, Kine charges 0 gas fees and a fixed trading commission of 0.1% per executed order, with exceptions for HT, OKB and WOO (which are charged at 0.8%).
Kine Protocol is third in importance and volume in the CoinMarketCap rankings, even though the comparison with dYdX and Uniswap V3 is not yet entirely on par.
Kine Protocol is a platform that was born after the two but in a short time has gained a lot of credit, becoming one of the top 3 decentralized exchange platforms.
Difference between a decentralized exchange (DEX) and a centralized exchange (CEX)
A centralized exchange (CEX) offers cryptocurrency exchange services to registered users. Its main service is usually to match buyers and sellers through an order book. A CEX may offer its verified users various crypto products.
For beginners, a CEX is the easiest way to get started, without the need for extensive knowledge of blockchain infrastructure and tools.
A decentralized exchange (DEX) uses on-chain smart contracts to manage its services. In most cases, it exchanges tokens from liquidity pools, thanks to liquidity provided by other users in exchange for exchange fees.
You do not need to register to access a DEX, which means they are open to anyone with a wallet and some cryptocurrency. DEXs are the gateway to the world of decentralized finance (DeFi) and offer a lot of freedom to users.
However, they lack the support that a CEX can offer and it can be easy to make irreversible mistakes when using them.
We can therefore say that the main difference between CEXs and DEXs is the custody of the funds: in a CEX the funds are held by the exchange, while in a DEX the funds are stored in the wallet whose private keys are controlled by the wallet owner.
This difference has led to the failure of many centralized exchanges, such as The Rock Trading.
Centralized exchanges continue to dominate decentralized ones, even after the failure of The Rock Trading
Despite the failure of The Rock Trading and the recent collapse of FTX, centralized exchanges continue to dominate the scene in the crypto market. Here are the best ones.
Bitget
Bitget offers a number of innovative features and benefits for traders seeking a secure and easy-to-use platform.
It enjoys fast transaction execution times and lower trading fees than its competitors.
In addition, the blockchain ensures that transactions are secure and tamper-proof, preventing any fraud or hacking attempts.
Another key advantage of Bitget is that it supports a wide range of digital assets, including popular cryptocurrencies such as Bitcoin, Ethereum, and Litecoin, as well as more niche tokens.
This makes it an ideal platform for traders who wish to diversify their portfolios and gain exposure to different markets. Bitget also offers margin trading, which allows traders to leverage their investments and potentially earn higher returns.
In addition to these features, Bitget offers a number of other advantages that make it an attractive choice for traders. For example, it offers an easy-to-navigate interface, even for novice traders.
It also provides a mobile application for trading conveniently on the go. Bitget is also committed to providing excellent customer support, with a dedicated team available 24/7 to assist with any problems or questions.
Overall, Bitget is a top-notch exchange that offers a number of features and benefits for traders looking for a secure and reliable platform.
And last but not least, Bitget has signed a major partnership with Leo Messi, with the goal of bringing as many people as possible closer to the potential of Web3.
Binance
Binance is the largest exchange by volume and has become incredibly popular with traders and investors, not surprisingly the largest in the industry.
It offers a number of key features and benefits that set it apart from other exchanges.
Binance is also known for its low transaction fees, making it an affordable option for traders. The exchange uses its own cryptocurrency, Binance Coin (BNB), which can be used to pay transaction fees, further reducing costs for users.
Binance offers a wide range of trading pairs, including popular cryptocurrencies such as Bitcoin, Ethereum, and Litecoin, as well as lesser-known cryptocurrencies. This allows users to diversify their portfolios and maximize profits.
In addition to trading features, Binance offers a number of other functions, such as staking and lending.
Staking allows users to earn rewards by holding cryptocurrencies on the exchange, while lending allows users to lend their digital assets to others in exchange for interest. Binance also offers a mobile app, which facilitates trading on the go.
Overall, Binance is a reliable, secure, and easy-to-use exchange that offers a number of benefits to traders and investors.
Its low transaction fees and wide range of trading pairs make it an attractive option for those who want to enter the world of cryptocurrencies.
Huobi
Huobi is an exchange that has become a significant player in the cryptocurrency market.
Its main goal is to provide users with the ability to trade in a safer environment.
Huobi also offers a wide range of trading pairs, with over 200 cryptocurrencies listed on its platform. This means that users have access to a wide selection of digital assets to trade, and the liquidity of the exchange ensures that users can execute trades quickly and easily.
Another key benefit of Huobi is its security. The exchange has implemented advanced security measures, such as two-factor authentication and multi-signature wallets, to ensure the protection of users’ funds.
In addition, Huobi has a strong security track record, with no major security breaches reported in its history. This is in stark contrast to other centralized exchanges, which have been the target of numerous hacking attempts.
Huobi also offers a number of tools and features to help users operate more effectively. These include advanced charting tools, order types, and trading bots that can help automate the trading process.
The exchange also offers margin trading and futures trading, which can help users maximize their profits.
Source: https://en.cryptonomist.ch/2023/02/21/the-rock-trading-importance-decentralized-exchanges/