Ultimately it’s about who can build the best crypto exchange...

Angelo and Magnus from dex.blue talk about DeFi communities

Hello DeFiers,

My Two Gwei is run by me, Liam. I work with dex.blue and the M2G is part of our community effort. Even though I could of of course talked to anyone, the demand was so high that I am very pleased to say: I finally got ‘em…

Here in #13 I introduce to you Angelo and Magnus of dex.blue, enjoy!

Be sure to also vote on next weeks topic here!

A chat with Angelo & Magnus

We all have met before, but maybe you guys can give us a quick reminder of who you are?

Angelo: Hi, I am Angelo Min, CEO of dex.blue here!

Magnus: My name is Magnus, co-founder of dex.blue, and I’m responsible for the Business Development and Community side of dex.blue.

How did you get into crypto? Where did it all start for you two?

Angelo: For me it all started with Bitcoin in 2013, but my passion for Ethereum sparked thanks to MakerDao: I was very active during the ICO years of ‘17 and ‘18 day dreaming of what the Ethereum community could deliver. And then when I saw the DeFi puzzle coming together a year and a half ago, I left Google and here I am now.

Thanks! Magnus?

Magnus: For me it began when I met Valentin, our CTO, back in University: He was a high-frequency trader and market maker. When he showed me what he was doing I got fascinated by crypto as an asset class with its trading opportunities due to the underlying volatility and market inefficiencies. This is when I dug deeper into Ethereum and fell in love with the whole space and the ecosystem.

Magnus, not too long ago you teamed up with a few other big DeFi projects and arranged something called the „DeFi User Survey“. Can you tell us what that was all about? What were the intentions there?

Magnus: Sure! So the DeFi space is a very young space with huge potential and lots of projects that have already shown significant traction – And even though the space is fairly new, we have a significant amount of money locked in it. So there are still a bunch of open questions that no one has really ever asked yet.

Individual projects researched within their own community, and we of course also have access to on-chain data. Yet, no one ever conducted collaborative cross-project research efforts to give a perspective on the DeFi space as a whole. What we wanted to do is give insights into the motivation of people to use DeFi: what their needs are, and what they think might be holding the ecosystem back.

The DeFi Users Survey was a cross-project initiative that aimed to serve the entire community to shape better products.

And the results: What were the biggest findings?

Magnus: We realized that DeFi, in some shape or form, is a fragmented young space. What I mean by that is that we have multiple user groups belonging to different types of DeFi projects: DEXes, Lending and Borrowing platforms, Wallets, Derivatives, and other categories like Lotteries, NFTs. What we see here are different user behaviors in these different groups.

To give you an interesting example: looking at Lending and Borrowing you would usually suppose the most important aspect is the APR rate. But that's actually not the case. The majority of people told us UI/UX is the most important feature for them.

I am sure we are all great fans of DeFi. But DEXes do traditionally have a very unique standing here.  Can you tell us where you see your and other DEX users in the ecosystem, Angelo?

Angelo: We are always doing our best to understand DEX traders and what they need. They are are active DEX users today for mostly these two reason:

  1. Being financially motivated, they see DEXes as a better way to make money: more opportunities and less friction.

  2. They understand and share the ideological roots of DeFi and want to see the space succeed.

As DEXes grow, we are seeing a broader range of products being offered to an also growing range of users: from simple spot-swapping on Uniswap to more complex derivative and synthetic assets trading on other platforms. This is a great sign of DEXes being able to offer real value to more and more users beyond a niche group of enthusiasts.

So, how do these two groups fit together? And how are you aiming to target both at once?

Angelo: Trading / swapping is an integral part of the Ethereum crypto experience whether you consider yourself a “trader” or not, all users are naturally exposed to it. What differentiates crypto traders, which are the users we primarily aim to serve at dex.blue, is that they are decisively financially motivated and believe that with the right tools and insights they can beat the market and capture alpha.

We aim to build a community that can be home to more sophisticated traders looking for insights and alpha, yet won’t scare away motivated DEX traders who are just getting started. If you are passionate about on-chain trading, you’ll feel right at home! 

How much is trading even a social activity and why does building a community around it make sense?

Angelo: As we also see in traditional finance, trading has stronger social aspects to it than many would imagine, and crypto trading is no different. Actually because crypto has a tendency to create owners out of users (thanks to tokens), online crypto communities are naturally very vocal and strong. And traders do participate in these communities as the market they are trying to understand is made up of the opinions and memes of its participants, which again are the people in the community.

So building a community for and around traders is necessary to give one more powerful tool for them to gain insights into the market, form an opinion before they can act on it.

So, as much as it’s dog-eat-dog, it’s everyone working together?

Angelo: Exactly, I think that's a good way to put it!

You told us why this community aspect is important- what’s the biggest obstacle in making this work regarding Exchanges in the DeFi space? 

Angelo: Fostering a strong community of traders is hard especially before you reach a critical mass of users. It might sound very straight-forward, but at the beginning you, as part of the team / community manager etc., have to continuously seed value and insights yourself so that there are some good reasons to join the community early on. Then with some good curation, the community will hopefully stand by itself after reaching a good number of quality members.

Magnus: Adding to this: An exchange is probably one of the hardest groups within DeFi to create a strong community around. Traders are opportunistic and as the whole space is hyper-competitive a user has many options where he can go and trade. So even if you offer a very good product with lots of unique features, you might still lose your users to the exchange with better rates and deeper liquidity. 

And while building a community is super important, building a good product that attracts users in the first place is just as relevant. 

You talked about the movement of traders from centralized exchanges to DEXes in the past. How do you generally see this developing in the future? 

Magnus: The numbers speak for themselves: In the past two years the amount of money locked in DeFi is constantly increasing and recently peaked at $1 Billion. So, I strongly believe that this is the trend DeFi will follow in the future as well. More complex and advanced products will bring more and more sophisticated users to the scene. These users bring more liquidity, and hopefully, as a consequence, institutional liquidity providers, market makers, and prop trading firms find opportunities and follow the decentralized way.

Angelo: My take is that in the long run it will be a cost-advantage game. DEXes and DeFi are uniquely suited to drive down costs with trust-minimising financial products that are composable and programmatically auditable. 

Ultimately it’s not about DEX vs CEX but who can build the best crypto exchange. DEXes came a long way and got a lot of support from its core enthusiast user base as the products slowly evolved and became more usable, now the time is right to push forward and show that a DEX can be a world class crypto exchange.

Thanks bois, see you on monday!

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