Why the Collapse of Centralized Exchanges is Going to Make Users Move On-chain
Centralized exchanges (CEXes) like Coinbase, Binance, and formerly FTX, have come to dominate the Ethereum trading landscape, with many users trusting these central points of control with their tokens.
As demonstrated recently by SBF and his associates, CEXes are susceptible to hacks, fraud, and other malicious activity. As a result, many Ethereum users are now looking to move their trading activity on-chain, that is, using Ethereum smart contracts to trade Ethereum tokens directly with each other, without the need for a central third party. This shift could have profound implications for Ethereum's future as a decentralized platform.
As more users become crypto-natives, which means that they have the majority of their assets on-chain and only use centralized services as means to get to and from their on-chain holdings. Becoming a crypto-native can be a daunting task but we are going to share a few resources and tips on how to make it in this brave new world.
Crypto-Natives Live on Ethereum
When moving on-chain you have to think of the blockchain you're going to spend your time on as your neighborhood. There are many reasons why crypto-natives largely prefer Ethereum. Ethereum is the most popular smart contract platform and it enables developers to create decentralized applications (dApps) and tokens with the deepest liquidity reserves.
Additionally, Ethereum has a strong community of developers and users, which contributes to its stability and continued growth. It also offers a variety of layer 2 solutions that can help improve scalability and speed. Finally, Ethereum is home to many of the top non-fungible tokens (NFTs), which are digital assets that are unique and cannot be destroyed or replicated. NFTs have become increasingly popular in recent months, as they offer a new way to tokenize digital assets.
Overall, becoming a crypto-native has numerous benefits and can help you tap into the growing world of digital assets.
How to Become a Crypto-Native
Ethereum, the world’s second-largest cryptocurrency by market capitalization, is more than just a digital currency. It’s also a decentralized platform that lets anyone build and use decentralized applications (dApps). Ethereum is still in its early stages, which means there’s a lot of room for experimentation and learning. If you want to become a crypto-native, here are three things you can do:
1. Get your Ethereum off the exchange. If you have funds on a centralized exchange withdraw them ASAP! there are a number of self-custody options available to users ranging from hot storage wallets, smart contract wallets, and hardware wallets. Their user experience has improved dramatically in recent years removing any leftover reason to keep funds in centralized places
2. Learn about Ethereum from friends or online resources. There’s a lot to learn about Ethereum, from blockchain technology and smart contracts to dApp development and cryptography. But don’t worry – there are plenty of people who are happy to share their knowledge. The main avenues to find other crypto-natives are Twitter, Telegram, and Discord. We created an open community called NerdQuarters where you can ask questions and get involved with the deeper side of crypto
3. Start experimenting with Ethereum. Once you have some Ethereum, you can start trying out different dApps or even building your own. This is where the real learning happens – by trial and error (and hopefully more success than error). There are plenty of resources to help you acquire the skills needed to make it on-chain. If you like coding you can try SpeedRunEthereum which is a set of challenges to get you started in the world of web3 development.
So there you have it: three steps on becoming a crypto-native! Now go out and get started on your on-chain journey.
Disclaimer: The author's personal view may be included in the information, which is subject to market conditions. Before making a cryptocurrency investment, do some market research. Your individual financial loss is not the responsibility of the author or the publisher.