Chinese users launch a "coin withdrawal campaign" and ETH and other stocks plummet, causing exchanges to scramble to defend themselves

On September 6, Chinese users launched a "withdrawal" campaign. Although the momentum was greater than the substance, data showed that the stock of ETH and other centralized exchanges was plummeting. CEXs began to defend themselves in a hurry, and a real full-scale war was about to come.

According to media reports, some centralized exchanges had difficulty in withdrawing funds and contract downtime in the early morning of the 6th. Among them, Huobi users reported that they could not cancel orders on ETH contracts. The official later stated that maintenance and optimization had begun; OKEx suspended ETH withdrawals, with the prompt "wallet maintenance, withdrawals suspended", which was later restored. Gate.io also experienced slow withdrawals.

Although major centralized exchanges have clarified this, the fact behind this is that DeFi coins, led by ETH, are flowing out in large quantities. Especially with ETH leading the decline recently, many users have bought the bottom on centralized exchanges and then withdrawn their coins to DEX for mining. According to CryptoQuant data, the ETH inventory on centralized exchanges is falling off a cliff. (The red line is the ETH inventory)

Interestingly, Chinese users launched the "9/6 Withdrawal Campaign" on this day, which was widely spread on WeChat groups, Weibo and other platforms. This activity has more momentum than substance and has not brought any impact for the time being. So far, it is not true that exchanges restrict withdrawals. Wu said that blockchain investigation shows that withdrawals from first- and second-tier exchanges are basically normal, but there may be some minor delays due to borrowing or technical failures.

Has the war between centralized exchanges and DEX begun? Not yet.

People recall the war between FCoin, a trading-cum-mining exchange, and traditional exchanges a few years ago. The three major exchanges felt a huge threat and not only quickly began to copy the FCoin model, but also because it was a zero-sum game, all kinds of public opinion attacks emerged one after another.

The DeFi ecosystem and centralized exchanges have a certain complementary relationship. Liquidity mining is a financial management model. Except for the first mine, the yield is not as high as that of a casino. If you want to get ten, a hundred, or a thousand times the return, many people choose to operate in the secondary market of centralized exchanges, including using leveraged contracts. The three major exchanges are also selling DeFi currencies crazily, and there are even some projects that are aware of CX and Ponzi schemes, such as MantraDAO.

Although the current AMM model of DEX has certain advantages, and a large number of EOS were bought from Huobi and sold at Defibox in the past few days, it is limited to a few single currencies after all. The number of DEX currencies and the richness of the models cannot be compared with mainstream exchanges.

But it would be self-deception to say that there is no competition between DEX and CEX, or even that they are completely complementary.

DEX has already invaded some areas of centralized exchanges, such as listing. Good projects no longer need to pay listing fees, conduct 1EO, or seek endorsement from big Vs. Liquidity mining has opened up a new zero-startup model. For example, transactions of mainstream specific currencies under the AMM model can obtain better liquidity and depth on DEX.

In the future, the derivatives sector may also become an area of ​​invasion. Sanshi Capital, led by Su Zhu, has invested in almost all decentralized contract trading platforms. In his view, contract products based on collateral and trading can interact with each other in a variety of ways, becoming a derivatives platform covering a variety of different mechanisms from AMM to centralized limit orders.

Centralized exchanges have already begun to defend themselves , and they first chose the "proxy mining model". Because liquidity mining has a certain complexity, "proxy mining" is very popular. Bigone, matrixport, cobo, and CoinIn wallet have all started the proxy mining model, charging a certain fee.

On the 2nd, Huobi Global said that it has prepared blockchain assets equivalent to 50 million USDT for DeFi liquidity mining. The first phase of 10 million USDT assets will be launched in batches, and the rewards generated by mining will be fully returned to users who participate in the event and lock HT and HPT.

Binance went a step further and combined liquidity mining with 1EO. On the 6th, it announced the launch of the "Binance New Coin Mining" platform. Users can mine new assets on the platform. The first project launched on the platform is Bella Protocol, a "one-click" Defi encrypted asset management platform. Users can participate in new coin mining and add BNB, BUSD or ARPA tokens to three separate pools to mine BEL.

In addition, mainstream exchanges are also involved in investments in many decentralized institutions.

The fastest counterattack or imitation of centralized exchanges (institutions) was by Justin Sun. He quickly imitated almost all DeFi elements such as decentralized exchanges, liquidity mining, and stablecoins, but due to the proliferation of counterfeit coins, everything became a mess.

Centralized exchanges do not have the genes required by DeFi or Dex. Any centralized institution that attempts to imitate Uniswap and YFI is unlikely to succeed in the end. DeFi is closer to the classical currency circle, where credit comes from code and community. Centralized institutions have absolute control over interests and management needs, and credit comes from companies and individuals. DEX and DeFi will continue to erode the field of CEX, but it is unlikely to eliminate (imitate) opponents. It is a possible trend that each excels in its own field.

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