The centralized trading platforms falsifies their transaction volumes deal with decentralized crypto-scholarships

According to Sasha Ivanov, the CEO of the Waves platform, the crypto-decentralized crypto-currencies (DEX) are much more reliable than the centralized trading platforms. Also CEO of the startup Blockchain Vostok Ivanov believes that the decentralized trading platforms of virtual currencies would help eliminate the erroneous volumes of the crypto-market.

Changpeng Zhao, the CEO of Binance - the world's largest cryptocurrency exchange service - pointed out two weeks ago that major cryptocurrency outlets had intentionally created non-existent volumes on their platforms. Market leaders would use dishonest methods to inflate their numbers.

Crypto-currencies crypto-currencies compete with centralized exchange services

Comparing the three trading platforms with the two most reliable cryptocurrency trading services on the market - Kraken and UPBit - ERC researchers have explored BitForex, FCoin and CoinEx engagement on social media, website traffic and global demand.Analysts at the CER, a virtual currencies research group, focused on three trading platforms that suddenly climbed into the crypto-trade rankings to be in the top 10 in just a few months. The group evaluated the business model and transaction volumes of BitForex, FCoin, and CoinEx .

They found the obvious lack of active users, traffic and engagement on social media. Moreover, the level of activities of the three crypto-stock exchanges would not be enough to justify their unrealistic volume.

BitForex "Manipulates" its transaction volumes, analysts said. Artificial stimulation of the volume thanks to the wash trade and bot trading on centralized stock exchanges is as easy as it is cheap.

The REB researchers explained:

"Considering our analysis results, it is obvious that BitForex probably pumps its trading volume using the wash trade, the most commonly available way. Although it can be done in different ways, the wash trade typically uses large transactions / trading to reduce the risk of loss. This practice is consistent with the analysis results we received and served as additional proof of BitForex's volume manipulation activity. "

The opacity of the business model

Many analysts argue that some central entities control centralized trading platforms. Their operations lack transparency. For example, a crypto-stock market may use a business model that is totally different from what it reveals on social media and to the general public. Their incomes may be below what they claim as Sasha Ivanov explains.

"Of course, there is this problem of false volumes. Stock exchanges try to inflate their numbers by imitating their natural volumes, mainly for marketing purposes. This issue is likely to be resolved in the same way as it has been in traditional markets, there needs to be some regulation and some control over cryptocurrency platforms. "

Moreover, crypto-investors have been able to anticipate the development of decentralized crypto-bourses. Distinctly sophisticated, they become more equitable and more transparent than centralized crypto-exchanges.

Decentralization ensures security and transparency

Security, transparency and liquidity are the three main advantages of decentralized crypto-currency platforms compared to centralized ones . Fred Ehrsam The co-founder of Coinbase believes that the decentralized exchanges can share a pool of liquidity on exchange protocols, which would allow them to have greater liquidity compared to centralized platforms.

Nevertheless, their adoption is limited because of the lack of user experience. Unlike centralized trading platforms, all or part of the trading data passes through the blockchain through the intelligent contracts .

Some decentralized exchange services have been scaled up, with a focus on developing the user experience . These include Kyber Network networks (having Vitalik Buterin on the team of advisers), AirSwap, 0x , and Waves.

Ivanov adds that decentralized exchange services will be able to compete with centralized platforms in the near future.

"Decentralized crypto-exchanges will become more and more important and it will be much easier to filter out the wrong volumes in a decentralized environment. Because basically, everyone can see all transactions and it is to check if certain transactions are suspicious. In the near future, we will see the total victory of the decentralized exchange services, but at the same time, there will be some interaction between centralized exchanges and decentralized exchanges. "

Meanwhile, Binance started to develop its own decentralized crypto-bourse . While the latter could have a negative impact on Binance's business model, it can not deny growing demand and investor confidence in decentralized trading environments.

What do you think of the big centralized stock exchanges that falsify their transaction volumes? Do you think that decentralized exchange platforms can compete with these centralized crypto-exchanges? Let us know in the comments section below.

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