Digital Social Hour
The Ugly Truth About Centralized Exchanges | Nick Nechanicky DSH #881
Tue, 12 Nov 2024 14:00:00 -0000
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Discover "The Ugly Truth About Centralized Exchanges" with Sean Kelly on the Digital Social Hour! 🚀 This episode is packed with valuable insights as Nick from DexToro reveals the dark side of centralized crypto exchanges and the rise of decentralized solutions. 🧐 Why did Nick pivot to decentralized exchanges after the FTX collapse? What makes Dex Toro a game-changer in the world of crypto trading? Tune in now to find out! 🎧 Join the conversation and explore how blockchain technology is revolutionizing finance. Nick shares insider secrets on creating a secure, transparent, and efficient trading platform, eliminating the risks of traditional brokers. 🌐 Don't miss out on this eye-opening episode filled with expert knowledge and exciting developments in the crypto world. 📈 Watch now and subscribe for more insider secrets. 📺 Hit that subscribe button and stay tuned for more eye-opening stories on the Digital Social Hour with Sean Kelly! 🚀 Join us on Apple Podcasts, Spotify, and more for all your favorite episodes. #livetrading #ethereum #btc #bitcoin #cryptonews CHAPTERS: 00:00 - Intro 00:30 - What is DexToro 01:53 - Uniswap vs SEC Regulations 05:00 - BetterHelp Overview 09:51 - How DexToro Generates Revenue 10:51 - Understanding Layer 1, Layer 2, Layer 3 13:18 - DexToro's Ranking in DEX Market 15:16 - Flaws in MetaTrader Analysis 19:15 - DexToro's Forex Strategies 22:10 - Authenticity in Results 24:20 - Tokenizing Real World Assets 25:20 - One Chain Concept 27:10 - Insights from Crypto Twitter 32:00 - FTX Developments 34:50 - Finding DexToro Resources APPLY TO BE ON THE PODCAST: https://www.digitalsocialhour.com/application BUSINESS INQUIRIES/SPONSORS: [email protected] GUEST: Nick Nechanicky https://www.instagram.com/nicknechanicky/ https://www.instagram.com/dextoro/ https://dextoro.bio/ https://www.youtube.com/@dextoro SPONSORS: BetterHelp: https://www.betterhelp.com/DSH LISTEN ON: Apple Podcasts: https://podcasts.apple.com/us/podcast/digital-social-hour/id1676846015 Spotify: https://open.spotify.com/show/5Jn7LXarRlI8Hc0GtTn759 Sean Kelly Instagram: https://www.instagram.com/seanmikekelly/ Learn more about your ad choices. Visit podcastchoices.com/adchoices
Chapter 1: What is DexToro?
All right, guys, last minute episode, but we got Nick from Dextor on the founder, right? Yes, yes. Nice. Thanks for having me. Crypto exchange. Yep. Decentralized crypto exchange, derivatives exchange. Nice. Powered by Ethereum blockchain. Why'd you decide to go the decentralized route?
Chapter 2: Why pivot to decentralized exchanges after the FTX collapse?
Yeah, so actually I started this immediately after FTX collapsed last year. And yeah, the whole idea was essentially I used to, I've been in this industry for like six, seven years now, started off in building fintech software algorithms for Forex traders, equities traders. Then from there, I started my own Forex broker, and I kind of saw how everything operated. It was all old school.
We were using crypto for deposits and withdrawals, and that's how I got into this whole world. I just saw everything was heading to be decentralized on-chain. Then once FTX happened, I sold that exchange, and I took those proceeds, and I went all into Dextoro because... You don't want to see FTX happen again, and I think people now appreciate decentralized exchanges, especially like Uniswap.
Everyone's using Uniswap, and Dextoro is basically like the Uniswap, but for trading derivatives. Leveraged, Forex, you can trade everything. As long as it has the price feed on-chain, you can trade it and have full custody of your funds. I love it. What happened with the Uniswap SEC stuff? Are they still fighting?
Yeah, they are. I think it's going to favor Uniswap for sure because there's really nothing you can do. It's just smart contracts. Yeah, Ethereum beat SEC, so I feel like Uniswap has a good chance. Yeah, you would assume that. I think the SEC is just... They're just bullying any large protocol that they're trying to get their...
Chapter 3: How does DexToro generate revenue?
they're trying to get their feet into the industry and take a little bit of a share and bully them around. But at the end of the day, it's just code. Dextoro is fully powered by smart contracts. I mean, once you execute them, they live on the blockchain forever. You can't, you can't like alter them. You can't change it. So you can't really do anything. You can't manipulate it. Yeah.
Even if you sue them or if you block their, I don't know, IP address or something, it doesn't matter. Like, Anyone who has an internet connection can use Uniswap forever. The smart contract lives forever. So that's why it's difficult. They can go after Binance, obviously multi-year. They already are right now. Yeah, they are. And now they're going after Coinbase as well. I saw that. Yeah. Crazy.
Because Coinbase is the number one exchange in the US. They're publicly traded. So you would assume that they're doing everything by the books. Right. Still. Yeah.
So you can go after all those because they hold your crypto and they have it in cold storage They keep I mean I've talked to a lot of executives They keep like ledgers and like banks and stuff across the world like they they have a good system But it's all centralized like you need you need human beings that they have dedicated to access your crypto, but it's not on the hot wallet so you can control them but with Uniswap and with Decentralized protocols.
I mean the people control their funds the whole time so you can't go after anyone. It's distributed too. All of our code base is distributed around the world. We use a unique tool called Fleek. It's through the IPS. Basically, we have multiple copies of the software accessible anywhere. If one domain goes down, there's 100 other domains that are available to use.
That's how Uniswap would work, too.
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Chapter 4: What are the flaws in MetaTrader?
That's interesting. So Dextoro can't really be hacked, then? Can't be hacked, can't be shut down, can't be nothing. Wow. Yeah, I mean, they can go after me as the founder. I mean, the Uniswap founder, too. He's in New York. Everyone knows who he is, but what are you going to do? Did they go after him personally, or did they go after Uniswap? After Uniswap, just, I think, to make a big...
To make a big headline news about it and basically show others. They always go after the biggest. The top, yeah. Yeah. Is that scary to you, though, because you might be a target in the future?
I don't think so. I think the difference here is that, okay, so they go after SPF, right? Once they go after somebody, they can take the whole business and that's it. Yeah. But if they like go after a founder of a DeFi protocol, okay, so you have the founder, but the business lives on forever unless you shut down the internet and the blockchain. Oh, so it would still go on.
This episode is brought to you by BetterHelp. Give online therapy a try at betterhelp.com slash DSH and get on your way becoming your best self. My fiance Ariel plays a big role in my mental health, helping me realize my true potential. Everyone's trying their best around you. So take time to appreciate someone close to you.
Chapter 5: How does DexToro ensure authenticity in trading results?
I've tried therapy in the past and it helped me go through some tough times. When I was in college dealing with mental health, I was on prescription medication. I actually had agoraphobia when I was in college and therapy helped me figure out some answers to how to fix that problem. For two months, I couldn't even leave my house or I would have a full on panic attack.
So I love companies like BetterHelp that can get therapy in front of the masses. But therapy definitely helped me get better. And I definitely appreciate companies like BetterHelp because it's completely online and it's conveniently suited to fit your schedule and accommodate life surprises.
Chapter 6: What is the potential of tokenizing real-world assets?
Chapter 7: How does the SEC impact decentralized exchanges like Uniswap?
Why'd you decide to go the decentralized route?
Yeah, so actually I started this immediately after FTX collapsed last year. And yeah, the whole idea was essentially I used to, I've been in this industry for like six, seven years now, started off in building fintech software algorithms for Forex traders, equities traders. Then from there, I started my own Forex broker, and I kind of saw how everything operated. It was all old school.
We were using crypto for deposits and withdrawals, and that's how I got into this whole world. I just saw everything was heading to be decentralized on-chain. Then once FTX happened, I sold that exchange, and I took those proceeds, and I went all into Dextoro because... You don't want to see FTX happen again, and I think people now appreciate decentralized exchanges, especially like Uniswap.
Everyone's using Uniswap, and Dextoro is basically like the Uniswap, but for trading derivatives. Leveraged, Forex, you can trade everything. As long as it has the price feed on-chain, you can trade it and have full custody of your funds. I love it. What happened with the Uniswap SEC stuff? Are they still fighting?
Yeah, they are. I think it's going to favor Uniswap for sure because there's really nothing you can do. It's just smart contracts. Yeah, Ethereum beat SEC, so I feel like Uniswap has a good chance. Yeah, you would assume that. I think the SEC is just... They're just bullying any large protocol that they're trying to get their...
they're trying to get their feet into the industry and take a little bit of a share and bully them around. But at the end of the day, it's just code. Dextoro is fully powered by smart contracts. I mean, once you execute them, they live on the blockchain forever. You can't, you can't like alter them. You can't change it. So you can't really do anything. You can't manipulate it. Yeah.
Even if you sue them or if you block their, I don't know, IP address or something, it doesn't matter. Like, Anyone who has an internet connection can use Uniswap forever. The smart contract lives forever. So that's why it's difficult. They can go after Binance, obviously multi-year. They already are right now. Yeah, they are. And now they're going after Coinbase as well. I saw that. Yeah. Crazy.
Because Coinbase is the number one exchange in the US. They're publicly traded. So you would assume that they're doing everything by the books. Right. Still. Yeah.
So you can go after all those because they hold your crypto and they have it in cold storage They keep I mean I've talked to a lot of executives They keep like ledgers and like banks and stuff across the world like they they have a good system But it's all centralized like you need you need human beings that they have dedicated to access your crypto, but it's not on the hot wallet so you can control them but with Uniswap and with Decentralized protocols.
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Chapter 8: What are the advantages of decentralized protocols over centralized exchanges?
That's huge, man. Because selling crypto right now on a centralized platform, they limit your withdrawals. Yeah. And you have to KYC. So like taxes and all that. There's a lot of negatives to it.
Yeah. KYC is the biggest thing. I mean, you know. The thing with KYC is everyone thinks, oh, you don't want to do KYC. You're definitely hiding something or you're a criminal. No, some people just value their privacy. That was the point of crypto when it started.
Yeah, that was the point. We've gone so far away from that. Once TradFi comes in and makes their move, soon they're going to... I don't know. I think everything is narrative-wise. They're trying to make it look bad. Obviously, the CBDCs, they want to cause a problem. They want to offer a solution, the CBDCs. That's how I see this industry. I feel like all the founders in DeFi are...
I mean, they're building their own business and products, but at the end of the day, I think the larger vision is we all kind of work together to make sure blockchain decentralization doesn't get compromised by the institutions. So how do you monetize this if everything is on the contract? Yeah. Trading fees, swap fees.
Yeah. Every interaction. So obviously, like when you use Dextoro, we take maker, taker fees. So same thing. You take a trade. We take a small cut. Got it. Yeah. Makes sense. OK. Yeah. So the incentives are pretty aligned then.
Yeah, I mean, they're aligned. Everyone, self-custody of their funds. And it's basically, it's like Binance. So Dextoro's whole vision, and we'll probably execute this in the next year, is to be like Binance, but fully powered by smart contracts. So that's the best way to put it. Dextoro is going to be like...
binance or coinbase but all smart contracts and no like no one even needs to like you know there's no like hr there's no like accountants there's no like people that control your funds or approve your withdrawals or decline your k what like it's just code it could be run by like a team of five that's awesome yeah so that's that's what's coming um blockchain now we have like layer twos i don't know are you like
I've heard of the layers. I don't know exactly what they mean. Could you explain layer one and layer two?
Yeah, layer one is just Ethereum mainnet. So it's Ethereum base layer. That's layer one. That's where all the transactions are approved. Sequencer fees are generated. And then layer two is just scaling solutions. So it basically uses rollups, which bundle transactions into transactions. a roll-up, and then they execute that off-chain, and they send it to the mainnet.
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