Synthetix and Uniswap: Building a next-gen DEX with CEX appeal

Decentralized exchanges are improving and look more like the smooth user-friendly experiences of their centralized competitors — but with the added benefit of keeping crypto in the hands of their users. 

Last week, Synthetix founder Kain Warwick announced plans for the new DEX, Infinex, with the goal to “compete directly with CEXs.” In the meantime, Uniswap introduced the UniswapX protocol, which would add a range of improvements from gas-free swaps and MEV protection to cross-chain swapping.

Both apps aim to give users an intuitive interface that mimics the ease of use of centralized exchanges — minus the centralization.

On a crossover episode of the Empire and Bell Curve podcasts (Spotify/Apple), host Jason Yanowitz talks about the protocols, starting with Infinex. 

The new DEX aims to take on centralized exchanges with user experience optimization on the front end, he says. Users sign up with an email and password and then encounter a streamlined interface, he explains, keeping the complexities of DEX operations in the background.

Framework Ventures co-founder Michael Anderson explains that the new features are part of a broader Synthetix upgrade to V3, “which is more about creating new markets, new forms of liquidity and new ecosystems to trade in.”

“It’s going to start off as semi-permissioned [and] eventually move to permissionless,” he says. 

“If you have a new idea for a financial product,” he says, “that’s really what the new protocol upgrades within V3.” Some upgrades, he adds, are “already on mainnet,” with more arriving by the end of the year.

Infinex will be a “consumer-friendly way of accessing those markets that doesn’t require you to really be a DeFi native,” he says, alleviating the problems of “going through the rigmarole that we’ve all become accustomed to over the last few years.”

“It is really an effort to bring in new users to DeFi.”

Time to build better front ends

According to Anderson, Synthetix founder Warwick recognizes that crypto’s infrastructure is now ready for a smoother, more scalable experience. “We have a lot of the tools in place to be able to accomplish the growth and scalability that we think we all should be having in DeFi.”

Anderson mentions cross-chain trading as another significant improvement with the new protocol. “That’s a huge element as well,” he says, “where you don’t have to just be relying on the liquidity that exists in a certain ecosystem.”

“You could be trading on Avalanche or Arbitrum or Optimism, eventually.”

Yanowitz notes his admiration for Warwick’s contrarian approach to the industry. “Everyone right now is so focused on infrastructure,” he says, “and Kain just comes out and is like, look, the infrastructure’s here. Let’s stop focusing so much on the infrastructure. It’s time to build better front ends.”

The newly introduced UniswapX protocol will give access “to tokens from a bunch of different chains,” Yanowitz says, with added benefits like the removal of gas fees from users, better price aggregation, a simpler user interface, and an easier onboarding process.

According to the Uniswap Labs blog, the protocol will be a “permissionless, open source (GPL), Dutch auction-based protocol for trading across AMMs and other liquidity sources,” beginning as an opt-in beta on the Ethereum mainnet.

With Infinex and UniswapX, Yanowitz says, “You’ve got two pretty damn good decentralized exchanges that are going to go head-to-head with centralized exchanges in the next market.”

“We’ve seen everything that has happened in the last 12 months from a centralized entity perspective in crypto,” Anderson replies. “We now have the tools to be able to have DeFi take up the reins and run with it.”

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