Incorporating Fiat Into DEX (Discussion)

Many people do not trust centralized exchanges because of the total control they have over customers' funds. A lot of centralized exchanges have packed customers' funds overnight, rendering a lot of people broke because of their failures. That is mostly one problem with anything that has the human touch. However, we must make decisions for ourselves and that is why we have protocols like DAO and other algorithms that require the participation of the people in the ecosystem.

I had a significant loss in the Cryptopia hack back then. FTX was another big mess in the crypto sphere that causes a lot of problems. Regulation is surely needed for quality control in the future, but there should be freedom for start-ups to have the chance to build irrespective of what they have. I have seen start-up companies that had nothing than their codes and idea and today they are doing great in the industry because of the blockchain components like the ICO, IEO, IDO and others.

In all, we all know that Decentralized Exchanges are better than centralized exchanges. However, there is clearly no way we can avoid centralized exchanges at this time in the crypto sphere. Most of them provide a lot of services that allow the conversion of crypto to fiat and some have p2p services embedded in them.

The challenge is that crypto acceptance as primary payment for goods and services will take a while before it becomes acceptable in the global marketplace. Some companies are already accepting crypto for payment, but I think it may take over a decade before we see a significant acceptance down to local marketplaces.

I was discussing with a friend who is a solidity developer yesterday how fiat could be incorporated in a DEX and the primary concern is the fact that fiat does not work without human interference. It flows through the banks. Only banks can hold fiat securely as blockchain is holding cryptos, but we came up with a tiny tweak or a possible way this could work through fiat-backed stablecoin.

The future of crypto payment lies on stablecoins and it could be any type. I have written an article on how stablecoin will be a better currency for payment than Bitcoin.

The Discussion

First, the DEX will have a fiat-backed stable coin and make its supply transparent. Then there will be a bridge on the DEX that allows stablecoin to move to a fiat zone. The company controlling the DEX will control the fiat payment based on the information provided by the customer. It will be just an all-round transaction. People will not have to do crypto transactions on DEX and move to Binance or other p2p platforms to sell to fiat. There could be a way this could be built better. It was just the discussion that we had. A lot of things need to be put into consideration, especially the security aspect. But if well brainstormed, a greater solution could come from the idea.

Thanks for reading.

_{I am tykee.}

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