With the first regulated, decentralized exchange listed in Germany, crypto exchanges are rapidly trending towards integrated exchanges.

The listing of Swarm Markets makes it a game changer for cryptocurrency exchanges as it combines the characteristics of both exchange models.

Swarm Markets’ liquidity provider program has already received a commitment of US$15 million, and more funds are expected to be invested later.

This is good news for crypto enthusiasts, and the market is sure to react optimistically.

Cryptocurrencies are blockchain-based decentralized assets that are traded on exchanges. Traditionally, many of these exchanges are centralized. As more and more people promote comprehensive solutions, they gradually tend to decentralize, which will bring a better user experience.

Users are excited by the news that Germany’s first regulated, decentralized crypto exchange, Swarm Markets, has opened its doors to users. The exchange is regulated by the German Federal Financial Supervisory Authority (BaFin). An exchange's transition to a comprehensive solution could change the overall dynamics of global cryptocurrency trading, which has been expected by users.

Decentralized finance (DeFi) can exclude centralized third parties such as banks, which control traditional finance. Swarm Markets has become the first decentralized exchange to launch KYC and AML.

The move has raised many questions among crypto enthusiasts: How much will they be regulated? Why should decentralized exchanges be regulated? These problems can only arise in the case of integrated industry pioneers seeking regulation.

The reason for the project, the company said, is to protect crypto asset traders from trading with counterparties who could be fraudulent due to the lack of regulation.

"We're going to find ourselves in a 'perfect storm' with historically low interest rates and people's assets being underutilized."

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Centralized Exchange VS Decentralized Exchange

Through centralized exchanges, users can deposit fiat currency to receive cryptocurrency. Users hand over direct control of their funds to the exchange, which then trades off-chain on behalf of the client within its centralized entity.

Centralized exchanges ensure speed because transactions are not made on the blockchain but regulated.

On the other hand, the development of decentralized exchanges is to solve the centralized nature of traditional exchanges.

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What does this mean for the crypto industry?

The launch of Swarm Markets is a positive development for cryptocurrencies and the DeFi industry in general, as it finally achieves the goal of an integrated decentralized state for cryptocurrencies as well as increased liquidity.

Liquidity has been the main obstacle to the success of most decentralized exchanges. Due to the regulated nature of centralized exchanges, they are more likely to have high liquidity, so users can entrust their funds to them.

Swarm Markets, a regulated, decentralized exchange, has announced a $15 million investment in its robust liquidity program, with more to come. The market is sure to react optimistically to the news.