The Ultimate Weapon vs Slippage
Dexpools offers alternate markets for traders to avoid slippage and other value loss
DeFi has been a concept since the early days of Ethereum, but there was not a mature ecosystem until 2020. In less than 18 months, the total value locked (TVL) in all of DeFi has grown from less than $1 Billion to $177 Billion.
With thousands of listed assets to trade, dozens of smart contract platforms to trade them on, and hundreds of automated market makers (AMM’s) liquidity can become critically fractured. Trading via both CEXes and DEXes often results in varying degrees of slippage loss and opportunities to be front-run. Issues are compounded when trading large volumes of tokens or if exchanges have low liquidity (especially prevalent with new currencies).
This is clearly a pain point for many different players in the cryptocurrency ecosystem. Low liquidity, slippage, and front-running impacts the entire ecosystem Traders swapping larger volumes of high liquidity token pairs
CEXes and DEXes can cause traders to incur large slippage losses if they desire to trade larger volumes of popular tokens or if they are on either side of transactions involving tokens with lower liquidity. Larger transactions also run the risk of being attacked by front-runners, resulting in less favorable traders or unfilled orders. CEXes with larger liquidity offerings also carry significant cons: high fees, lack of swapping options/liquidity for new currencies, KYC requirements, centralization, and lack of custody.
Often paid in their own projects tokens, these innovators are often faced with the following dilemma; do they cash out and make life changing money while simultaneously harming their project and investor community, or do nothing and potentially miss profit opportunities.
The exclusivity of ICOs/IDOs and tentativeness of project teams when it comes to selling their currencies at low liquidities means traders miss out on unique opportunities to be involved with the cryptocurrency ecosystem.