Semi-DEX vs. Hybrid DEX-Aggregator: What’s the Difference?
Lions and tigers and…. this type of DEX and that type!
If you follow Bridges on any of our social media channels, you’ll know that there are a lot of terms to describe the soon-to-launch Bridges Exchange. In fact, when we start saying things like “the world’s first…,” we often run afoul of advertising policies that restrict the use of such superlatives.
Still, you might have seen Bridges invariably described as a semi-DEX or hybrid DEX-Aggregator and wondered, “What do those terms even mean?”
Whether you’re a newbie to crypto or a more seasoned player looking to brush up on the ever-expanding vocabulary of technologies and capabilities, you’re in the right place. And the simple answer is this: Bridges is both a semi-decentralized exchange and a hybrid decentralized exchange–aggregator- — but these terms refer to different aspects of the exchange.
Ready? Let’s dive in…
What is a semi-decentralized exchange?
At its core, a semi-decentralized exchange holds to the very same tenets as decentralized finance, namely:
- A belief in the importance of democratizing finance
- A commitment to open source access for tokens
- The ability to use the exchange anonymously
- A decentralized governance structure
Where a semi-decentralized exchange differs is in how it goes about achieving these goals. As we’ve written about previously, the prevalence of scams (including rug pulls, pump-and-dump schemes, honeypots, project shutdowns, and outright theft) have opened an enormous gap between the priority of these goals and the ability of DeFi participants to actually achieve them.
As a semi-decentralized exchange, Bridges builds upon the core tenets of decentralized finance with commitments to:
- Improving safety (for holders and developers alike)
- Minimizing the risk of scams
- Safeguarding the innovations of project developers
You can read more about how we’re pursuing each of these commitments here.
What is a hybrid DEX-aggregator?
A hybrid DEX-aggregator is (as the name implies) a decentralized exchange combined with elements of an aggregator.
What’s that, you ask? In a nutshell, it’s an answer to the chicken-and-egg challenge of launching a new exchange.
As a new exchange, Bridges recognizes that it will take some time for liquidity providers to migrate to Bridges Exchange (primarily due to locked liquidity). This would limit the projects that can list with us — even if the developers of those projects wished to do so.
With Bridges, if you want to swap a token, we’ll first check to see if we have liquidity for that token. But if we don’t, then the swap will execute using the liquidity in another exchange.
The benefits of this approach are the ability to:
- Tap into a lot of liquidity with minimal effort
- Offer more tokens in the swap early on
- Attract more projects to list on the Bridges Exchange
So there you have it!
There’s a lot of innovation taking place right now in the DeFi space, and Bridges is on the forefront of many of those innovations. We’re the world’s first dividend-paying, anti-scam, semi-decentralized hybrid exchange-aggregator. (It’s a mouthful, but we promise that it’s as cool and important as it is necessary.)