The Current Status and Future Challenges of DEX Development

Decentralized Exchange ( DEX ) has rapidly developed in recent years as a core component of Decentralized Finance ( DeFi ). Currently, DEXs are mainly divided into two models: order book-based and Automated Market Maker ( AMM ).

The order book model facilitates trading by matching buy and sell orders, making it suitable for scenarios requiring efficient price matching and flexible trading strategies. The AMM model, on the other hand, utilizes liquidity pools to automatically set prices and provide liquidity, simplifying the trading process.

Data shows that the trading volume and user numbers of DEX are rapidly increasing. As of July 2024, there are approximately 835 known DEXs, with a 24-hour trading volume reaching $8.35 billion and a monthly visit count of 320 million. Compared to traditional centralized exchanges, DEX has significant advantages in terms of transparency, permissionless access, and inclusivity.

However, DEX also faces some risks and challenges:

1. Smart Contract Security Risks
2. Transaction Front-Running and MEV Attacks
3. High transaction costs due to network congestion
4. "Rug Pull" scam ( Rug Pull )

To address these challenges, DEX platforms are exploring new technological solutions. For example, ArtexSwap utilizes Artela's EVM++ and Aspect technologies to enhance security while improving performance.

• Introduce a blacklist mechanism to prevent malicious activities
• Set up Anti-Rug mechanism to monitor and prevent suspicious token issuance
• Utilize AI to predict slippage, protecting users from losses due to price fluctuations.

Despite the numerous challenges that still exist, the importance of DEX as the infrastructure of the cryptocurrency ecosystem will continue to rise. In the future, the development focus of DEX may be on enhancing security, improving user experience, and exploring more innovative application scenarios.