A Competitive DeFi Space: Is the rDEX Ready?
Decentralized finance platforms were created to disrupt the financial landscape, eliminating the expensive middleman in the process. As exciting as that might sound, it’s not so easy. Traditional financial institutions have the edge thanks to a mammoth-sized war chest. In comparison, DeFi looks like a cornered, badly bruised mammal surrounded by bloodthirsty carnivores. This uneven contest buds well for competition as every protocol has to do better.
DeFi protocols are underdogs. And only the strong survive. People are faced with many options in an unregulated ecosystem where anything can happen. The newly launched rDEX, StaFi’s decentralized exchange isn’t coming to a red carpet; there are far too many DEXs begging for attention.
With lots of bumps expected en-route to Eldorado, the question remains: is the rDEX ready?
The Intricacies Of The DeFi Space
DeFi dapp developers aim to build decentralized applications that put the middleman to the sword (not literally) while bringing financial products to the little guy. On paper, it’s such an amazing concept that has received commendations from various quarters. However, the reality is rather harsh.
DeFi dapps are growing in their numbers, which isn’t a bad thing; users get to have more options. The problem is the little guy isn’t keen on using these applications; the vulnerability of DeFi dapps to attacks doesn’t help. Lots of potential users that form the target market of these dapps are scared of losing their assets to exploits and getting worthless compensations in return.
DeFi dapps are often caught in between a rock and a hard place in the sort of service rendered. While the aim is to cater to the unbanked through blockchain technology, most of the potential users in this bracket aren’t exactly tech-savvy. The majority are overwhelmingly suspicious worsened by a highly volatile crypto market. With the odds heavily stacked against dapps, competition was always imminent.
There’s also the legal aspect to worry about. Financial agencies of the government are looking to clip the wings of DeFi dapps, which has given rise to DAOs. Many decentralized finance platforms are opting to do their business with a DAO running the show to avoid becoming target practice for agencies of government like the SEC. Of course, this isn’t a permanent solution. Legislation can be enacted to make DAOs illegal or empower government agencies to go after such entities. The recent inquiry by Congress on stablecoins is just an example of what awaits DeFi outfits in the future.
Can The rDEX Compete?
The launch of the rDEX has been long expected due to its perceived impact on rToken liquidity. Anyone holding rTokens can now trade them for FIS, StaFi’s native token. Also, you can easily purchase rTokens using FIS on the exchange. With that said, the DEX thrives on the needs of users of Staking Finance protocol. It’s a unique situation since only rToken can be traded on the decentralized exchange.
The competitiveness of the rDEX is tied to the popularity of liquid staking. As more people get in on the action, decentralized exchanges like the rDEX get more visibility since StaFi protocol is one of the leading lights in the space. But is liquid staking getting the attention it deserves? Perhaps that’s the case as data shows staking services like StaFi has become the preferred vehicle for anyone staking on POS chains.
If the attributes of DEXs determine their competitiveness, products like rDEX will stand out despite being new to the scene. The decentralized exchange has been built to navigate the risk of impermanent loss for anyone adding liquidity to its pool. If the rDEX achieves this feat, more users will be tempted to use the exchange.
The StaFi team understands how competitive the DeFi landscape is and how incentivizing plays a significant role in usurping the top players. Thus, it’s no surprise the protocol is working on a liquidity mining program that users of the rDEX can utilize. If the proposal gets the necessary backing, lots of users will flock to the DEX like flies to honey.
Is The rDEX Ready?
The rDEX has recently launched on mainnet. This comes after weeks of product testing to ensure the DEX is safe for use. The audit report from Peckshield did raise concerns about certain issues in the codes, but those have been resolved.
From a security perspective, the rDEX is ready to serve users. Yet, that’s only one area from an array of possible talking points. The rDEX provides a unique service since only rTokens and the FIS token can be traded. Anyone using the StaFi liquid staking solution is better served by trading those interest-bearing tokens on the rDEX. That’s an edge the DEX enjoys. Whatever competition that’s responsible for the liquidity on multiple decentralized exchanges dry out isn’t something the rDEX has to worry about. At the moment, it’s the only decentralized exchange on the StaFi chain, which means all trading can only be done on the DEX.
There’s little or no competition for the rDEX. It’s target users are mostly rToken/FIS holders, and the StaFi chain has only one DEX. However, from a liquid staking perspective, the competition is fierce. StaFi and in turn, the rDEX has its task cut out for it. Yet, there’s no doubt the DeFi project will prevail. Of course, increased visibility for the DEX through marketing should do the trick.