As gateways to the world of cryptocurrencies, centralized exchanges have amassed large amounts of influence over the years. These companies control the power to make or break blockchain projects, and are usually the only businesses that remain profitable regardless of the volatility that the crypto market experiences.
All of this wealth and influence has led to serious unethical acts of market manipulation and exploitation that expose exactly why decentralized exchanges are needed now more than ever.
Roy Huang, Co-founder of Fresco Network, revealed on twitter yesterday that a top 30 ranked exchange had openly asked his company to use trading bots to create fake volume with 0 transaction fees.
The yet to be identified exchange promised to provide an “API & trading assistant to help achieve 50 BTC daily volume” and that they would even let the trading assistant (“a simple trading bot”) be a ‘market maker’ free of transaction fees.
The shocking implications of this are outlined in full detail by crypto Trader Silvain Ribes, where he believes “more than $3 billion of all cryptoassets’ volume to be fabricated”, and that OKex, the #1 exchange rated by volume is the main offender with up to” 93% of its volume being nonexistent”.
In addition, Roy points out the disturbing fact that the NASDAQ stock exchange only charges less than $200,000 for listing mega companies, while a lot of crypto exchanges are trying to charge more than $500,000 in listing fees.
Both of these posts are shared with the fitting caption – “Road of decentralization impeded by greed”.
As more crypto influencers like Joseph Young share the news, people all over the web are beginning to share the same sentiment, which is that centralized exchanges operate in the very same corrupt manner than any centralized organization with too much wealth and influence will do if unchecked.
Therefore, the need for decentralized exchanges like 0x or Blocknet are greater than ever, and these organization must quickly take the place of their centralized competitors in order for what Roy and others see as an “industry problem” to solve itself.