Synthetix is putting over $40,000 in crypto on the line to entice users to try out the faster beta of its decentralized exchange (DEX).
“While DEXs offer significant improvements over CEXs [centralized exchanges] in terms of safety of funds and transparency, there is typically a painful trade-off on transaction speed,” Synthetix CEO Kain Warwick told CoinDesk in an email.
It doesn’t cost anything more than a tweet to participate in the demo DEX, but users need to act fast because they only have till Tuesday to place in the top 20 and win a piece of the 50,000 SNX the company has put up in prizes.
But the real reason traders might be interested over time is because this project could demo a world where DEXs become feasible at scale.
Everyone knows that the main use case for crypto is trading, which has led to a massive and glaring irony for crypto users. As much as they might like the decentralized nature of these assets, in order to trade efficiently they rely on centralized crypto exchanges, which tend to be vulnerable to cybercriminals. On a DEX, users trade straight from their own wallets.
A long-held dream for crypto has been to create DEX software that allows users to custody their own crypto until the moment of trade and then trade directly with counterparties. That’s why even one of the biggest CEXs, Binance, has built a DEX. But many DEXs have proven more centralized than they admit.
Synthetix’s beta relies on a deployment of the Optimistic Virtual Machine (OVM) from Optimism, the company behind the latest scaling and usability solution for Ethereum.
“I think optimistic rollup is the first Ethereum layer 2 solution that checks all the boxes for DeFi,” Hayden Adams of Uniswap told CoinDesk, explaining that effectively replicating the Ethereum virtual machine on the second layer takes a lot of headaches out of putting different applications together for developers, making the so-called “money…