[capkutay]

FTX is a centralized (not DeFi) exchange that used their own coin as collateral and obfuscated their liquidity. This wouldn’t be possible in open decentralized exchanges that many in web3/crypto were advocating for. However SBF made it his mission to lobby regulation on DeFi and a blind eye to CeFi exchanges like his own.

https://www.politico.com/newsletters/morning-money/2022/10/2...

[hiq]

You just get a different set of tradeoff on a decentralized exchange. E.g. many users don't have the basic opsec required to protect their private key without losing it.

For a cryptocurrency owner taken at random, I think it's likelier that they make a mistake with their private key than they lose tokens held in a Coinbase (or another CEX among the less dodgy, regulated, etc.) account.

[boppo1]

>basic opsec required to protect their private key without losing it.

Exactly. I've long wondered if there's any way to overcome this without essentially going back to a 'trusted broker/custodian' model

[vkou]

> many in web3/crypto were advocating for.

If many people in this space are advocating for decentralized exchanges, how come everyone uses centralized ones?

If there's ever a time and place for voting with your wallet, this seems to be it, and the wallets are speaking loudly and clearly.

[zeroclip]

The wallets are speaking clearly, DeFi volume is through the roof right now.

https://defillama.com/dexs

A lot of people put money on CEX because they are ignorant, or willing to take on some risk for slightly cheaper and faster trades. Those people probably regret their decision now. If they used Uniswap and Aave they could not have withdrawals paused because of one company’s insolvency.

[apienx]

"If many people in this space are advocating for decentralized exchanges, how come everyone uses centralized ones?"

Convenience.

[boppo1]

DeFi doesn't interface with fiat.