What is “Omnichain”?
The term OmniChain was first proposed by LayerZero, which uses programmable message cross-chain as the underlying technology to promote the application interaction and liquidity aggregation from several public chains.
There are problems in the current Defi field.
For example: AMM DEX such as UniSwap/Pancake can only be used as a pool on a certain chain. The pool on the A chain cannot be used by the pool on the B chain. There is no transmission of any information between the two pools.
Another example of this would be: 1inch single-chain liquidity aggregator which is also only limited to the liquidity of a single chain and cannot aggregate the liquidity of any other chain.
Omnichain DEX can replace CEX.
The superior Omnichain DEX can not only solve above problem but also replace CEX. In the era of the omnichain, how can DeFi replace CeFi? We compare the DEX in the DeFi with the CEX in CeFi to introduce this possibility.
1:Security: The open source DEX contract code guarantees security with chain consensus, and since it’s a decentralized autonomous process its impervious to CEX manipulations as was seen in recent case of FTX.
CEX uses a head personal that is responsible for security.
Both CEX and DEX would have a code that executes to carry a function. The difference is in a CEX this code can be manipulated and concealed. In a dex all executed transactions can be seen transparently.
2: Liquidity: omnichain DEX, which can aggregate AMM DEX pools on each chain, or other non-AMM DEXs pending orders.
We only need to add the pool depth of Uniswap/Curv/Pancake, the depth is enough to be comparable to the first CEX, Binance and better than other Cexs.
3: Transparency: The whole Omni chains DEX is all code. This means each transactions can be audited on the chain, and the transactions on the chain are extremely visible, this eliminates the problems that CEX ledgers like FTX faced in the recent pass as funds are managed by the code that can be changed.
4: User experience: At present, most of the chain confirmation time is about 3 seconds (the Aptos/Sui confirmation time is less than 1s). It only takes only about 30s for two chains to complete the cross-chain exchange. For centralized exchanges to complete operations to switch between chains, three steps are required: the first step is to deposit. The second step is swap. The third step is to withdraw. At present, no centralized exchange can complete the three steps of deposit, exchange, and withdrawal within 30 seconds. In comparison Omnichain Dex is equipped to do this. If you have any doubts about the above comparison, you can personally experience OmniBTC’s omnichain exchange product: OmniSwap.
We compared the decentralized omnichain DEX and the centralized CEX from the four dimensions of security, liquidity, transparency, and user experience. The result is: omnichain DEX wins over CEX. For other similar financial products in the lending field, omnichain lending wins over centralized lending- especially in the field of transparency. Due to the above stated reasons, we can conclude that it is entirely possible to replace CEFI with omnichain DEFI- with major advantages of security and transparency. The demand for developers who see the benefit of omnichain for DEFI have been insisting on development, product iteration, and the replacement of CEFI. The adoption of such platform is just around the corner especially taking into consideration what has recently happened in the most centrally managed entities when the experience of DEFI is better than that of CEFI, people will no longer find a reason to use CEFI.