# kaal:claim:3808852-026

**Claim.** A decentralized exchange can be seen as architecturally centralized, because the DEX code and its operational rules in effect create the exchange and provide a central order exchange and price discovery function rather than a peer-to-peer exchange.

**Type.** failure  **Support.** argued

**Holds when.**

- applies to DEX whose operational rules are set by code

**Source quote.**

> Architecturally, DEX can be seen as centralized because the DEX code and the operational rules of the DEX code in effect create the exchange and facilitate a central order exchange function and price discovery, not a peer-to-peer exchange.

**From.** Wulf A. Kaal, *Decentralization and Feedback Effects* (2021), IV. Market Decentralization, page 18

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

**Verify.** sha256 of source PDF `31e91158fdeefebc2f0be54ebf89751f7cdd4c89ecea932888f5ba9be6b1caba` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20-%202021%20-%20Decentralization%20and%20Feedback%20Effects.pdf

**Failure mode.** architectural recentralization of DEX  (family: recentralization-drift)

**Topics.** decentralization

**Keywords.** dex, architectural-centralization, code-as-rules, decentralization-theater

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