# Dex `kaal:entity:dex` **Status.** derived This node is assembled mechanically from the 11 claims that carry the concept tag `dex`. It is a roster of what the corpus says under this term. It is **not** an adjudicated definition: no single statement here has been ruled canonical, and no first-appearance call has been made. Read the claims and judge for yourself. ## Every claim under this term 11 claims across 3 works, 2021 to 2022. **2021** - [3782216-005](https://wulfkaal.github.io/claims/3782216-005) [mechanism/argued] -- Bundling transactions with zero knowledge proofs makes the scheme trustless, so users need not trust the bundlers: a malicious bundler cannot steal their data. > This makes the scheme trustless, meaning it doesn't matter whether you trust the bundlers or not, they can't steal your data. Craig Calcaterra, Wulf A. Kaal, Decentralized Finance (DeFi) (2021). SSRN: https://ssrn.com/abstract=3782216 - [3782216-008](https://wulfkaal.github.io/claims/3782216-008) [failure/argued] *(failure mode)* -- Liquidity has always been a problem on decentralized exchanges because meaningful history and reputation cannot form where there is little or no governance structure, no insurance, no appeals process and no reputable decentralized news service. > But liquidity has always been a problem in decentralized exchanges, as meaning- ful history and reputation are difficult to achieve when there is little to no governance structure, no insurance, no appeals process, and no reputable decentralized news ser- vice Craig Calcaterra, Wulf A. Kaal, Decentralized Finance (DeFi) (2021). SSRN: https://ssrn.com/abstract=3782216 - [3782216-022](https://wulfkaal.github.io/claims/3782216-022) [failure/argued] *(failure mode)* -- The code that constitutes a decentralized exchange can create new risks to market integrity, because automation removes the human backstop in compliance, back office and settlement. > The code may also create new risks to market integrity because of its automation and lack of a human backstop in compliance, back office, and settlement. Craig Calcaterra, Wulf A. Kaal, Decentralized Finance (DeFi) (2021). SSRN: https://ssrn.com/abstract=3782216 - [3808852-023](https://wulfkaal.github.io/claims/3808852-023) [definitional/argued] -- Decentralized cryptocurrency exchanges epitomize market decentralization because they let users interact and trade anonymously in a secure environment without third party intermediation. > DEX epitomize market decentralization because they allow users to interact and trade anonymously in a secure environment without the need for third party intermediation. Wulf A. Kaal, Decentralization and Feedback Effects (2021). SSRN: https://ssrn.com/abstract=3808852 - [3808852-024](https://wulfkaal.github.io/claims/3808852-024) [mechanism/argued] -- 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. > 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. Wulf A. Kaal, Decentralization and Feedback Effects (2021). SSRN: https://ssrn.com/abstract=3808852 - [3808852-025](https://wulfkaal.github.io/claims/3808852-025) [failure/asserted] *(failure mode)* -- Most decentralized exchanges have struggled with liquidity and price discovery. > Most DEX have been struggling with liquidity and price discovery. Wulf A. Kaal, Decentralization and Feedback Effects (2021). SSRN: https://ssrn.com/abstract=3808852 - [3808852-026](https://wulfkaal.github.io/claims/3808852-026) [failure/argued] *(failure mode)* -- 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. > 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. Wulf A. Kaal, Decentralization and Feedback Effects (2021). SSRN: https://ssrn.com/abstract=3808852 - [3808852-027](https://wulfkaal.github.io/claims/3808852-027) [failure/argued] *(failure mode)* -- Even though the creator of a DEX plays a limited role in its evolution, the code that provides the exchange's operational rules may still be subject to the centralized control of certain developers, and a completely open source DEX with no ongoing developer involvement remains untested. > the code that provides the operational rules of the exchange may still be subject to the centralized control of certain developers. The idea of a completely open source DEX without any ongoing developer involvement remains untested. Wulf A. Kaal, Decentralization and Feedback Effects (2021). SSRN: https://ssrn.com/abstract=3808852 - [3808852-028](https://wulfkaal.github.io/claims/3808852-028) [failure/evidenced] *(failure mode)* -- Decentralized exchanges may fail to ensure market integrity, because the code that creates a DEX can allow asymmetric distribution of trading information based on user status. > the code that creates a DEX may also allow the asymmetric distribution of trading information based on user status.19 Wulf A. Kaal, Decentralization and Feedback Effects (2021). SSRN: https://ssrn.com/abstract=3808852 - [3808852-029](https://wulfkaal.github.io/claims/3808852-029) [failure/argued] *(failure mode)* -- Automation and the absence of a human backstop in compliance, back office, and settlement create new risks to market integrity on decentralized exchanges, including wash trading, frontrunning, and insider trading. > The code may also create new risks to market integrity because of its automation and lack of a human backstop in compliance, back office, and settlement. Wulf A. Kaal, Decentralization and Feedback Effects (2021). SSRN: https://ssrn.com/abstract=3808852 **2022** - [4015908-036](https://wulfkaal.github.io/claims/4015908-036) [design/asserted] -- No more than 40% of total token supply should be auctioned in a fair launch, with 10% serving as a buffer paired with raised funds as permanently locked DEX liquidity and the other 50% allocated to a DEX pair with the raise proceeds to provide long-term locked liquidity. > it is ill advised to auction more than 40% of the total token supply. 10% of token supply should serve as a buffer. paired with the funds raised to form permanently locked liquidity on a DEX. The other 50% should be allocated to a DEX in a pair with the funds from the token raise. Wulf A. Kaal, Fair Token Launch (2022). SSRN: https://ssrn.com/abstract=4015908 ## Verify Every claim above resolves to a record carrying a verbatim source quote, the sha256 of the source PDF, and a preformatted citation. Nothing here asks to be taken on trust. curl -s https://wulfkaal.github.io/entities/dex.md | sha256sum **Canonical form.** This markdown file is the canonical hashed representation of this entity node. Its sha256 is the content hash.