Benefits of DEX Integration for Blockchain Projects
Decentralized exchanges (DEXs) are gaining traction as an alternative to centralized exchanges (CEXs) for crypto projects seeking to have greater control over their native tokens. DEXs offer reduced counterparty risk, low fees, and the ability to build on DEX features such as non-custodial trading, lack of KYC obligations, and reduced security risks. This article explores the benefits of DEX integration for blockchain projects and how Native, a specialized project, offers a DEX-as-a-feature solution to help developers deploy exchanges integrated directly into their DApps.
Issues with Centralized Exchanges
Cryptocurrency exchanges have played a significant role in the adoption of blockchain technology, but the industry has become too dependent on them. Today, the crypto industry is still geared toward exchanges and traders rather than blockchain projects and developers. Centralized exchanges charge exorbitant listing fees and are the ones who profit from all the trading fees, which drains value from crypto projects and makes it hard to attract liquidity in a sustainable way. Additionally, DApp builders lose control over the liquidity and value of their tokens by having to abide by the exchange’s policies and fees.
Regaining Control Over Native Tokens
To attract liquidity, blockchain projects are exploring the benefits of DEX integration. DEXs have reduced counterparty risk and low fees due to the absence of intermediaries. This solution may give app builders more control over the liquidity of their tokens, reducing reliance on centralized exchanges and improving security. Moreover, using DEXs rather than CEXs allows blockchain applications to benefit from DEX features, including non-custodial trading, reduced security risks, and lack of KYC obligations.
While using a DEX enables self-custody and permissionless settlement, DEXs still lack support for off-chain pricing models, where pricing is based on the total aggregate liquidity in the market (both on- and off-chain) as opposed to the liquidity that happens to be in a given automated market maker’s (AMM) smart contracts. Besides, visiting a third-party DEX forces users to leave the apps they love whenever they make a trade, leading to a friction point in the user experience.
Shopify for DEXs
The solution might be to make DEXs as efficient as CEXs and give each project ownership of its own DEX. The good news is that specialized projects such as Native provide DEX-as-a-feature solutions. Native is a DEX infrastructure layer or a toolkit for any other project to become its DEX, cutting out the middlemen and reducing costs, much like Shopify allowed entrepreneurs to create their own e-commerce sites.
Native’s proprietary integrations with professional liquidity providers and market makers account for over 30% of daily crypto trading volume, giving teams a significant advantage over standalone DEXs. Projects can set their swap fees, which go to token issuers, and use any liquidity sources, pricing models, and trading pairs they desire. With its innovative approach and focus on empowering crypto entrepreneurs, Native is helping blockchain projects benefit from increased revenue and deeper liquidity. Meanwhile, DApp users can swap the native token directly in the app, enjoying a simpler and more frictionless experience.
Liquidity is King
Liquidity can come from one of three sources: the project itself, the community, or external liquidity sources such as automated market makers (AMMs), aggregators, and professional liquidity providers. Native can leverage a wide range of liquidity resources thanks to its approach of using off
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