Episode #3: CEXs: What are they, and why do they matter?
On today’s episode of the Accel Defi Podcast, Scott and Eric interview Accel Defi’s Director of Accel University, Chris A.k.a. "Drake", as they discuss CEX’s (or Centralized Exchanges), why they matter in the crypto space, and Accel Defi’s listing on its first CEX: Hotbit.io
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Episode Transcript:
[Scott] On today's episode of the ACCEL Podcast, we are interviewing the director of ACCEL University, Chris. We discuss Sunshine, why they matter in the Crypto space, and ACCEL’s official listing on Hotbit. As always, my name is Scott, this is Eric, and you are listening to ACCEL Podcasts, Accelerating Your Crypto Investments, one podcast at a time.
[Scott] Today on the ACCEL Podcast, we have the director of ACCEL University, Chris. Chris, could you tell us a little bit about your background in the crypto space and your involvement in ACCEL?
[Chris] Hey, how's it going? Thanks for having me on. Real excited to be here today. Yeah. So I'm leading the ACCEL University, which is our educational DAO that we are going to be building. As far as my background in crypto, I've always been an investor in crypto since way back when I had Ethereal in 2017 and things like that. But I never really kind of dove deep or took it seriously until closer to like 2020. And I would say that was when I became a little more active on the crypto scene and also in trading and investing in some more alternate coins or alternate tokens and things like that. Outside of crypto, I've been a full time investor and educator for a few years now, and so kind of developing educational resources and adding that value to the DeFi space has always seemed like something that I would be interested in and also a perfect fit for this project. As far as developing the educational side of ACCEL, I would say that is definitely my main priority here on the team. And for anyone who's not aware, basically what we're doing is building a DAO or decentralized autonomous organization that's going to be completely focused for ACCEL holders and we're going to be providing a ton of resources and tools that only ACCEL holders can access. And our goal here really is to kind of build the knowledge base that all of the ACCEL holders have and allow our community to not only grow but become more knowledgeable in the default space itself.
[Scott] Yes, I know that's something that definitely excites me. I know there's a lot of people in the ACCEL community. I get really excited about the education side of things. I think it's something that a lot of people kind of have a little bit of a shortcoming on. And it's not in a bad way. It's just with all these mean coins that kind of took over the DeFi space in the last year or two, I think it just kind of caused the craze where people were just kind of throwing money at the wall and seeing what sticks. So I think it's really exciting to see the advancement of the education portion for DeFi as a whole.
[Eric] So, Chris, that leads into my question for our listeners. So our listeners that need to be educated on it can you exactly tell us what ACCEL University and how do you think the ACCEL University is filling the space or the void that has been plaguing this crypto space? Because people just come into it and they really don't have a great grasp on it. So how does ACCEL University fill that void? [Chris] Well, really, the idea here is that we're being able to tackle investors and holders and traders of all types of backgrounds and welcome them to the project. And so in doing so, a lot of the resources that are being provided and developed for this DAO are going to be categorized towards beginner traders, towards more intermediate and also advanced people. Right. So really, ultimately, our goal here is to be able to have something that can provide resources and value to a crypto trader of any background. And ultimately, what that comes down to is we're also building a safe space where beginners people who are new to crypto can kind of come in, take advantage of these resources, and kind of get a jump start on their crypto experience or get a head start on that and kind of learn how to really be able to succeed in their crypto experience.
[Scott] Yeah, I know something that's something that really excites a lot of different people in this space. Education is something like I said, that it's kind of far and in between to find someone to help, especially when you're talking on the DeFi side of crypto. It's just very hard to find that connection then. And even as you kind of bridge between DeFi and crypto to see some of these larger coins, I know one of the big focuses in the ACCEL community and kind of give you an opportunity to show off a little bit of what ACCEL University does is we're going to kind of touch on centralized exchanges, if that's okay with you, Chris.
[Chris] Yeah, absolutely.
[Scott] On the topic of education in the crypto space, could you help us listeners understand what exactly centralized exchange is and why most crypto investors use them?
[Chris] Yeah, absolutely. I think that's definitely something we can talk a little bit about because there's definitely some confusion that I think would be worthwhile clearing up. So really central exchanges. Right. Usually abbreviated CEX, those are going to be the largest platforms that you can buy and sell crypto on. And ultimately, those are also the most accessible platforms for a lot of people. And so central exchange is a couple of examples. The biggest ones would be like Coinbase, for example, or Binance. I think an analogy that works well is basically a central exchange kind of operates like a large bank or a large crypto bank and provides people or users who are making accounts at these banks. Right. The ease of access, the ability to make transactions, additional features that something like a bank might offer. Right. So, like, for example, added security features on the ease of being able to trade crypto. Some of the things that we see on central exchanges are limit orders, for example, where you can submit in order to buy a crypto at a very specific price. And then ultimately you have those security features, you have those extra things that are kind of making your experience with crypto not only easier, but a little safer, a little more accessible. Right. And ultimately, I think some things to think about when it comes to central exchanges is just that whenever we talk to someone new to crypto, that is always their first point of reference is some type of central exchange. Right. If you talk to someone who doesn't know a lot about crypto, Coinbase is still going to be that household name that they might know about. Right. And then the largest cryptos that get listed on these central exchanges are also the ones that develop that same kind of popularity in the DeFi space. Right. So that's something that we see the largest audience or the largest user base for crypto dissipate in central exchanges and use these.
[Eric] So, Chris, now that we've explained how it is to trade on the centralized exchanges, is it possible that we can get an explanation as to the natural progression when we go to defy or decentralized exchanges, how we can bounce back and forth between both?
[Chris] Yeah, absolutely. So, I mean, there's something to consider in between the difference between a centralized exchange and a decentralized exchange. And ultimately that idea is that obviously your decentralized exchange doesn't afford you those same kind of luxuries that a central exchange does. And so, for example, a decentralized exchange, like Uniswap, which is the most popular one for trading Ethereum based tokens, is going to work very similarly to a central exchange. And if you have a token that's maybe listed on a central exchange, you can kind of hop back and forth between the two. And either way, regardless of which exchange you are interacting with, you're still going to be trading the same cryptocurrency or the same token.
[Scott] Yeah. So I think that's something where sometimes people in the crypto space get a little bit confused. And I think there's a little bit of a misconception. And I think one of the big things is the amount of exchanges out there. I think a lot of people are a little misled because there's so many mainstream ones that people only really see those handful there at the top. So usually tend to not know about these other exchanges. We know ACCEL was listed this week on their first exchange, which was HotBit, which is a pretty high volume exchange. Could you explain what the importance and why this is a good milestone for ACCEL moving forward?
[Chris] Yeah, absolutely. So HotBit is a pretty large central exchange, and it also serves a lot of overseas customers. Or we also see a lot of people from overseas using this specific exchange at the very base level. Ultimately, what we're seeing is that being listed on HotBit is going to give new people who want to get into the ACCEL project that ease of access. Right. We're going to be kind of widening our user base and be able to approach and appeal to a lot of these crypto investors who don't necessarily know about or deal with decentralized exchanges. Right. One of the other things to consider is that it's going to offer us increased volume across the board. Basically, the more exchanges that you can be listed on, the wider your audience gets. And so the more volume you're going to get, the more holders, the more traders, the more people we can reach out to. And for example, people who have a HotBit account but might not have ever heard of ACCEL. That's a person that we can now reach with our project, as opposed to originally or initially the entire pool or audience were people who were already familiar with how to use a decentralized exchange like Uniswap. One of the other things to consider when it comes to why this listing is important to the project is that any trades that happen for ACCEL on HotBit, they're not going to have any taxes. Right. Normally, when you look at a decentralized exchange, there are a lot of things you have to worry about, like taxes on transactions, the price impact from your buy order, things like gas fees that doesn't exist on a central exchange. Those are features that are unique to a decentralized exchange. So anybody who wants to kind of trade or buy ACCEL with a small amount of money now they can do this and they don't have to pay taxes on HotBit. There's no taxes for transfers either. There's no gas fees. And so really what we're doing is we're creating this new pool of users to kind of come in and learn about ACCEL.
[Scott] Yeah. So I think that's definitely something that some people don't fully understand. But being able to get into these different demographics is definitely a huge thing that these exchanges allow. Because trading on Uniswap or on these different taxes, it gets expensive with the fees and the taxes. So it allows people to come in for a smaller amount, and it allows them to make that initial investment and maybe they could come in and see how it goes. And it also allows them the freedom to come out of the centralized exchange and move into the DEX. If I'm correct and still allow them to use the staking pool, is that correct? [Chirs] Yes, that's correct as well. And so you can take advantage of the features that ACCEL has, like the staking and rewards, but you can buy on the central exchange, and this is appealing to maybe larger traders or larger investors, people who want to make larger transactions as well, because now they can do this without those taxes, without those gas fees. And then really now you just transfer over to your take those ACCEL tokens out of your central exchange and place them into your own wallet, and you can stick those into the pool like any normal ACCEL tokens would be.
[Scott] Okay. So that makes sense that it allows you to have that extra basically an extra pool in a way. So I guess my next question would be, so as we're growing onto these different exchanges, we know we're on Hotbit now. We're going to BKEX next week. How will that work when the bridge is intact? Will that kind of allow even more ability for that? Do you think that will limit it even more? So how do you think it will work with the exchanges? And once we have the bridge up to connect the different chains?
[Chris] Yeah. So there's actually two factors to consider when you're thinking about this part. And the first would be the idea that by being listed on a central exchange, we are creating a separate pool, like a separate liquidity pool of ACCEL tokens. Right. And this is going to help bring a little stability to the price of ACCEL itself in general. Right. One of the analogies to consider when talking about this is almost like, again, a bank or let's say we talk about a normal company. A normal company doesn't have all of their assets in one bank account. Right. A normal company doesn't have their entire financial standing based off the number of one account. Right. It might be spread in different areas. And that's basically the way a pool or liquidity pool might work. And so it's going to be spread out in different areas. And so the more we create these pools specifically, like the one that is on HotBit now, which would be a separate pool. And then when we get our next central exchange listing, that would be another pool. All of these add stability to the price, which helps out the project on a much larger scale. But then what happens when there are differences or discrepancies in the price across these different pools? Well, traditionally, for any token that has multiple liquidity pools, generally speaking, the true price is going to be the average price across all these. And so there might be small differences, but the true price of a token is going to be the average price. But in this function or in this feature, there's actually a couple of things that you can kind of look at. And so the first is going to be that bridge that you mentioned, and that bridge is what is going to help keep the price level across all the different blockchains across all the different pools. Right. For example, right now we have our ACCEL token on the ETH side, and that ACCEL token on the ETH side has multiple liquidity pools. Then we have our ACCEL BNB pre sale. And that comes with its own price and its own pool as well. How does this kind of all play out in the bigger picture or the bigger scheme of things? Well, ultimately, the internal bridge is going to help bring that price average. Right. And it's also going to allow easier transactions or interacting across the blockchain. Right. So, for example, if we think about the bridge once it's finalized, what could happen is that somebody could buy ACCEL using BNB and then swap it transferred into the bridge and receive ACCEL on the ETH side, the ETH blockchain. And then in doing so, maybe at the end of that process, they can transfer that to a central exchange and now sell their ACCEL for no fee. Right. Or another example would be you can buy ACCEL on the ETH side in a central exchange, like take those points out of the central exchange. Maybe you transfer them to your own wallet or something. Then you use our internal bridge and you can transfer those over to the BNB blockchain. And eventually, when the staking pool is created on the BNB side, maybe now you can stake your ACCEL tokens on the BNB side. And so that bridge is ultimately what's going to be a function that facilitates the ease of use of ACCEL across all of these blockchains and across all of these different prices. The last thing to consider here is also that there are opportunistic traders, arbitrage traders who will trade ACCEL when there are discrepancies in the prices. And that could be advantageous to the project in a couple of ways. The first is going to be that, generally speaking, arbitrage trading doesn't hurt the price of ACCEL itself, but rather these volume traders are taking advantage of the differences in price between maybe one central exchange and another or one central exchange and one decentralized exchange. So one DEX. And what this is going to do is it's going to increase the volume of transactions that are taking place for ACCEL as a whole. Right. So we're getting increased volume across the board, and that would be beneficial to us in general. So really there's a lot of different things to consider when it comes to kind of the bridge and the different prices. But generally speaking, if you kind of just look back at all the different examples I just gave, all of these are positives for ACCEL as a whole. All these are benefits or opportunity for growth when you look at it from this perspective.
[Eric] Chris, thanks so much. That gives tremendous clarity for our listeners to understand exactly how the opportunities are rising within ACCEL on both of the two blockchains that we're in right now between ETH and the BNB side. One other question I'd like to pose to you. Could you possibly explain to us the matchmaking services and how that applies to ACCEL?
[Chris] Yeah. So ultimately speaking, there are a couple of different features in place that are going to kind of help balance out the price and these are automated features. So for example if we look at HotBit which is our first centralized exchange that we were listed on, there are features integrated into their platform to kind of help bring some stability to the price and also try to help bring that price closer in line to the deck's price or the price of ACCEL on a different exchange. So these functions or features are also going to kind of build volume across the board are also going to try and balance the price and they're also going to ultimately try to limit those discrepancies or lower them so that when people come and look at ACCEL as a project they see a very similar price across the different exchanges.
[Scott] That all sounds perfect Chris I know everything with the ACCEL University is super exciting. I know getting to hear a little bit about the exchanges and allowing our listeners to get a little bit more insight on what exactly goes on on these exchanges was definitely something that I think is definitely worth a listen and I think they're going to get a lot of good quality out of just this short 30 minutes. Thank you again, Chris. It was a super exciting episode to hear about the different centralized exchanges and how they're playing into the future of ACCEL and allowing our listeners to further their understanding of centralized exchanges and DEXs together. Anyone listening to the show today that wants to connect with Chris and ACCEL University, you can find him on YouTube, we have a channel on there and you can also come into our official Telegram. He's in there very often and also on our discord. Once again I want to thank you for the awesome interview Chris and we look forward to our next podcast.
[Chris] Awesome. Thank you so much for having me.
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