The new DEX ramps will offer users access to new assets, as well as greater liquidity and security.
The ShapeShift non-custodial crypto currency exchange today announces the integration of nearly a dozen decentralized exchange protocols (DEX), a measure designed to relieve both the enterprise and users of KYC loads, while simultaneously offering traders superior liquidity, pricing, asset availability and security.
Prior to the integrations, ShapeShift required users to undergo a KYC process in order for the company to remain compliant, as the exchange served as a counterpart to the users‘ trading. In an interview with Cointelegraph, ShapeShift CEO Erik Voorhees said that the regulated services will continue to trade assets that are not currently available through DEX, such as native Bitcoin, but that „all non-DEX trading in ShapeShift will be phased out“ later this year.
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„By integrating our users directly into the DEX trade, it means we are no longer part of the trade; we are not a custodian, counterparty or intermediary of any kind at any step of the process,“ Voorhees said. „Therefore, we are purely a software technology company, and in this capacity we are not regulated because we are not involved in a regulated activity.
According to Voorhees, the new supported DEXes include the popular decentralized finance protocols (DeFi) „Uniswap, Balancer, Curve, Bancor, Kyber, 0x, mStable“ as well as a half dozen others. In addition, the list of integrations „will continue to expand as DEX technology allows.
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The ShapeShift movement is part of a broader trend of exchanges, wallets and other cryptoservices that provide access to DeFi platforms; a movement, according to Voorhees, born out of the maturation of a DeFi ecosystem that „is rapidly becoming superior to the status quo.
Voorhees indicates, however, that he is suspicious of „centralized custody services“ that provide access ramps to the DeFi sector, also known as „CeDeFi,“ a phenomenon Voorhees believes will be short-lived.
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„They are incompatible, because they have to censor users and put in place access controls. For example, a centralized exchange in Venezuela is restricted by capital controls, while in DeFi it is not (a decentralized protocol operates exactly the same in Venezuela as anywhere else)“.
In contrast, Voorhees argues that non-custodial services such as Shapeshift are a more natural fit for DeFi integrations, and as such these initial DEX integrations could also be the basis for a broader set of ramifications to more varied DeFi products, including, Voorhees suggested, a decentralized Bitcoin exchange service.
Ultimately, providing these services to users is not an advantage, but a market reality.
„Two or three years ago, decentralized trading existed, but it wasn’t liquid or easy enough to be convincing at scale,“ he said.
„That has changed, and as the industry evolves, we too must always work in the interest of our users and towards advancing self-sufficient finance.