A global shift is underway towards a future of an open and fair financial system, and Bluefin is here to accelerate this shift. Bluefin aims to onboard millions of users to open finance within the next five years by empowering everyone connected to the Internet with frictionless and fair access to financial markets.
Financial Markets: where we were
Traditional financial markets suffer from five fundamental flaws: inefficiency, access restrictions, opacity, centralized control, and the lack of native interoperability¹.
Inefficiency arises from multiple middlemen operating between investors and financial markets, increasing costs. Opacity favors large institutions with an informational advantage, such as access to counter-party risk information or private data.
Centralized control and access restrictions result in governments and large institutions monopolizing financial markets, money supply, and investment opportunities.
Lastly, traditional financial platforms do not cooperate with one another without requiring centralized authorization and expensive integrations.
Breakthroughs of Blockchain: where we are
Blockchain technology offers a fundamental breakthrough in disintermediation, potentially revolutionizing how the financial industry works. Permissionless protocols, by design, create trustless and decentralized ecosystems for value transfer. Decentralized Finance (DeFi) addresses all five of the flaws of traditional financial markets while introducing other areas for improvement, such as user experience and performance.
Decentralized Exchanges (DEXs) are yet to seriously contend with centralized exchanges (CEXs) on trading volume. DEXs facilitate below 10% of the total volumes in the spot market and below 2% of the total in the derivative markets.
However, as the issues of centralized exchanges have become very apparent over the last few months, there is an explosive opportunity for growth in the DEX Derivatives market.
Problems with Centralized Exchanges
A few key players have concentrated dominance of centralized exchanges, leading to monolithic decision-making and control over the future of the blockchain industry. Centralized platforms have been known to prioritize their interests over that of the users, undermining the trust and credibility of the blockchain ecosystem. Users must trust that the exchange is treating their assets in good faith and that they will not be excluded or censored without recourse. Over time, the only way to overcome those risks is to practice the ethos of “not your keys, not your crypto.” Web3 users shouldn’t have to trust intermediaries; self-custody of funds, transparency, and trust minimization are needed to make Web3 sustainable and efficient.
Opportunities for Decentralized Exchanges
To cross “the chasm” and win market share, DEXs must combine their inherent advantages with the ease of use of centralized competitors. The ideal DEX must offer advanced trading features and diverse asset offerings, address liquidity, ease of onboarding, reliability, trading latency, and cost, and offer a familiar onboarding and login experience with account recovery options. With emerging Web3 innovations like account abstraction paving the way to better Web3 experiences, wallets will become more accessible and easier to use for a broader audience, ultimately promoting wider acceptance of decentralized financial services.
DEXs are a compelling alternative to centralized exchanges, and with time the chasm will be crossed as the global shift to open and fair markets progresses. On Bluefin, traders enjoy self-custody of funds, access without rules and conditions, and no interaction with intermediaries. Faster L1 blockchains like Sui will help realize the vision of DEXs that compete with CEXs on performance, cost, and latency.
Decentralized Future: where we are going
To achieve global adoption of a performant, secure, and fair decentralized exchange, Bluefin aims to provide a user experience as familiar and efficient as that on centralized exchanges without sacrificing performance, security, and self-custody.
Easy access: Bluefin will offer easy access through Web2-like login via third parties while maintaining the self-custody and privacy of Web3. Account abstraction will enable sub-account and account recovery features, enhancing user experience and convenience.
Scalability and sustainability: Bluefin will focus on long-term success by providing CEX-like speed and performance. Decentralizing the order book through distributed trusted execution on Arbitrum and an on-chain book on Sui will contribute to this goal.
Decentralized, community-driven, and fair-value distribution: Bluefin will be a DEX with fair value distribution to users. This vision is supported by the power of DAOs and token governance.
Unstoppable, automated, and interoperable: Bluefin will operate with other protocols indefinitely, delivering value through automation and interoperability. This flexibility will enable the trading of various tokenized assets, including stocks, options, futures, and other derivatives.
Unmatched future utility: Bluefin's platform will offer portfolio margin with spot, derivatives of all asset classes, options, money markets, mobile access, and a Web2 interface with a Web3 backend. Users will enjoy the benefits of centralized exchanges without sacrificing custody or control.
Bluefin’s goal is to become the ideal decentralized exchange, merging the advantages of centralized exchanges with the revolutionary potential of blockchain technology. Everyone is encouraged to join the Bluefin community and actively participate in the governance process, aligning the incentives of traders, liquidity providers, and community governance to drive liquidity and network effects.
The future of finance is decentralized. Join us, and help accelerate this future together.
¹Defi and the Future of Finance - Campbell Harvey, Ashwin Ramachandran, and Joey Santoro