Much like the dot-com era of the mid-1990s, cryptocurrencies are said to be on the verge of a period of hyper-adoption, where growth reaches an inflection point and begins a trajectory to the moon. Looking at the past decade, the adoption of cryptocurrencies is mainly due to the emergence of exchange platforms. Thanks to the numerous exchanges, many first-time users have successfully made their way into the world of digital currencies.
Ironically, while these exchanges have been key to the success of cryptocurrency adoption, they have also sparked a new debate, that between a centralized exchange (CEX) and a decentralized exchange (DEX). While both provide the same trading functions, a CEX, as the name implies, relies on a trusted third party to store digital assets, creating a liquidity pool.
These exchanges remain the most popular as they offer an unmatched user experience and features for trading assets across multiple chains with ample liquidity. The only concern is that the intermediaries may be corrupt, a target for fraud, and require users to comply with their rules.
On the other side of the spectrum are DEXs, such as Uniswap (UNI) and PancakeSwap (CAKE). These DEXs provide traders with real ownership rights over their assets. Instead of relying on a central authority, users rely on an automated protocol that provides additional security and eliminates the need for KYC ( Know Your Customer) procedures.
DEXs also require complex knowledge, making them difficult to use for most users, which in turn raises concerns about limited liquidity. The question for investors then becomes, should a user give up control for convenience or overcome the learning curve to gain asset ownership?
In part, the answer is not black and white, but looks more like a gray area characterized by DEX aggregators. DEX Aggregators work by combining data from multiple exchanges to improve liquidity and optimize pricing.
One of the aggregators currently operating in this space is Arken Finance, a user-friendly platform with a swap engine that its team calls “Best Rate 3.0.” With Arken, users can leverage their sophisticated algorithm to select the best exchange provider for a given swap and enable split trades for better pricing. The result is an offering that eliminates the question of what to give up when trading cryptocurrencies.
Reducing the price impact
Arken Finance’s Best Rate Swap Engine received its first update in December 2021, consisting of two parts. First and foremost is the “indexing algorithm”: a solution for selecting the best prices from multiple pools and re-evaluating the associated price conditions throughout the trade, all within seconds.
The second component is the “Split Order Algorithm”: a tool that favours large transactions by splitting an order into multiple orders so that they can be executed in the pools with the best exchange rates. Arken Finance’s algorithm can even be applied to stablecoin exchanges.
The latest version 3.0 of this algorithm has further improved the competitiveness and efficiency of the tool in the market. Among other benefits, the team boasts a 20-30% reduction in gas fees and the elimination of double exchange tax.
While this upgrade is still new to the market, the team points out that there is still plenty of room for growth, including the potential to become a universal platform that can connect to any DEX without sacrificing speed and ease of use. Arken’s Best Rate Cross Chain Swap will effectively become the bridging technology needed for seamless token trading experiences.
By combining it with the multichain market site, users will have access to the cross-chain search function to simplify the transaction process. After coin selection, the subsequent steps of bridging and exchanging are performed in a single flow. Arken Finance’s latest features display the transaction history so users can manage all the steps in between.
Viability for the long-term
Together, the team’s goal remains to deliver an equal financial opportunity from everyone worldwide, aiming to advance the DeFi sector as a whole. According to the Arken Finance team, “What matters most is the project’s long-term viability and advantages to our users. Finally, we want to encourage the DeFi sector to mature and flourish gradually with exceptional projects that can contribute significantly to the DeFi’s future.”
Over the next couple of months, users can expect expansion onto two new chains, the addition of new DEX integrations and the release of the ARKEN coin, the project’s token, to the public.