kaal:claim:3808852-024

Conflicts of interest and counterparty risks are absent on a decentralized exchange because proprietary trading intermediaries such as market makers and centralized third-party operators cannot inject themselves into a transaction.

Source quote, verbatim

Proprietary trading intermediaries, such as market makers and centralized third-party operators, cannot inject themselves in a transaction. As a result, conflicts and counterparty risks are absent in a DEX.

From

Wulf A. Kaal, Decentralization and Feedback Effects (2021), IV. Market Decentralization, p. 17
https://ssrn.com/abstract=3808852 · source PDF

Cite as

Wulf A. Kaal, Decentralization and Feedback Effects (2021). SSRN: https://ssrn.com/abstract=3808852

Holds when

applies to DEX where settlement is delivery versus payment directly between trading parties

Classification

mechanismsupport: arguedrisk-and-incentiveseconomics

Verify

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