Should we allow assets to be disabled from the Decentralized Exchange?
Counterparty's decentralized exchange, also known as the 'DEX' is a popular feature for the platform, which enables users to buy and sell their assets without an ...
What's up party people. Chris DeRose here, community director of the Counter-Party foundation and in today's video I wanted to answer the question: Why shouldn't we allow people to disable Dex trading of their assets? So for a little background, this came up on the Counter-Party chit-chat. This came up on the forums. Some people are saying, "Well maybe what we should do, is disable the ability to use the Dex on some assets," if they want to opt into that. So if you have your own asset, if you're selling chocolates and you didn't want people to trade the chocolates on the Dex. You would have the ability at the time of creation to disabled that.
So we hashed it out, and people weighed in and I like weigh opinion. The opinion that I believe to be the best representation of why we shouldn't allow people to do that. So, first and foremost, you have to consider what the block chain is and what the Dex is. The Dex is probably never going to be the primary way that people trade assets. It's probably never going to be fast or efficient enough to do that. It will be significantly faster than it is now.
It will be usable for a lot of this stuff, but in most terms of what a deep marketplace needs to be, you need sub-second transaction times. You need really fast executions and block chains just don't do that. So then we say, "Well what is the value of the Dex? What does the DEx do?" and the answer is two things. First and foremost, what it will probably do, which is inter-bank settlement. Settlement between the exchanges for different assets. It'll be slow, but it'll be accurate and it'll be settled.
It'll be certain and there won't be any, or at least very much counter-party list. That's the first thing that the Dex'll do. The second thing that the Dex could do, is perform trading for assets that carry a lot of counter-party risk. So, things that are heavily regulated or very encumbered by regulation. Those would also be things that would fail-safe to the Dex. But I don't see that the Dex is going to be the primary mechanism by which assets are traded and exchanged and won't be the primary clearing house.
So then in that context you have to say to yourself, "Well what are you doing by rendering it useless for it's purpose". Saying, "This asset can't go through the DEx". Well what you're doing at the point, is you're still enabling the primary asset holders at the clearing houses. The off chain brokers to trade and sell just as they normally would do, but you're encumbering efficiency why it leaves that bank. You're saying that, "That exchange can't trade it as easily with other banks" but if there are sophisticated measures at their banks, if they are large exchanges, they'll certainly be able to communicate among themselves and perform that trade. So it begs the question, are you achieving anything other than encumbering the system and what are you setting out to achieve? I mean, not very much.
I don't see how that's useful but that's that. That's this question. I don't know if you have any others. If you do, certainly add them to the comments section below or if you want, tweet me. I'm DeRosetech on Twitter. I love to hear from you.
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