Presented by Phemex

Crypto represents a broader revolution toward a more decentralized world. However, this mission can cause friction with the traditional way of doing business. As a result, crypto platforms are now looking for ways to transition to a more decentralized structure that truly involves the customer from the ground up.

2022 proved to be a turning point in the attitude of crypto traders toward exchanges, which are now facing increased scrutiny from their customers. The collapse of FTX has left wounds that can’t be healed with just new promises. Instead, transparency and decentralization are becoming more crucial than ever for exchanges to regain and maintain the trust of their customers.

Involving users from the ground up

As part of its mission to prepare for this new environment, cryptocurrency exchange Phemex has already launched its proof-of-reserves, based on a self-verifying Merkle tree model. Their self-proving approach helps users verify that the exchange has the reserves it claims to without requiring a third-party auditor.

A hash tree, also known as a Merkle tree, has leaf nodes labeled with the cryptographic hash of a data block

A hash tree, also known as a Merkle tree, has leaf nodes labeled with the cryptographic hash of a data block

Aside from increasing transparency, Phemex also aims to decentralize its trading platform. It aims to fulfill an authentic Web3 vision by involving users in platform decision-making, blurring the line between centralized exchanges (CEXs) and decentralized exchanges (DEXs) and bringing the best of both worlds together on one platform.

That is why Phemex calls itself a semi-centralized crypto exchange. It’s not just an exchange, however. By giving its users access to a unique Web3 environment centered around the Phemex DAO, the project enhances user experience from an unconventional angle.

Source: Phemex

Source: Phemex

Gamified Web3 colony

Leveraging Web3’s cutting-edge technologies and inspired by Vitalik Buterin’s concept of “soulbound tokens,” Phemex has introduced the Phemex Soul Pass, a soulbound token (SBT) that serves as a permissionless passport to the Phemex Web3 ecosystem. This token grants different privileges, including staking rewards, fee discounts, and a voice in platform decisions.

Furthermore, users can gain access to the gamified Web3 colony called Phemexia. The immersive world represents a “new model of community building and governance,” according to the Phemex team. In addition, the platform sets up the Phemex DAO to integrate a decentralized governance structure, giving builders, partners and stakeholders the power to shape key decisions.

Within this world, the Phemex Soul Tree represents the core of the platform. The tree’s roots represent the strength of its decentralized governance model — the more roots it forms, the stronger its foundation will be. The branches and their leaves represent the focus on growth that Phemex believes comes from a solid decentralized community.

Influencing the decision-making process

All Phemex Soul Pass holders have the potential to participate in the Phemex DAO governance model. Currently, the exchange is giving out Phemex Soul Pass whitelist spots to active traders and contributors, and users can join the Phemexia Discord for whitelist opportunities. Phemex DAO members with vote escrow Phemex Tokens (vePT) can propose actions and vote on four key areas — the platform’s growth, operations, treasury management, and external partnerships. Decisions are made democratically and executed centrally, making Phemex a semi-centralized exchange. Holders can also make suggestions for improvements following the guidelines set out by the platform.

Source: Phemex

Source: Phemex

Stella Chen, chief marketing officer at Phemex, explains the role Phemex DAO plays within the broader Phemexia environment:

“As we make our platform governance structure more decentralized and community-driven, the DAO acts as the decision-making apparatus for all of Phemexia. Its oversight includes operations, treasury management, growth, and DAO-to-DAO collaborations.”

Phemex aims to prepare for tomorrow’s world and maintain the trust of its users, underlined by the decentralization of its governance process. Furthermore, the introduction of an immersive, gamified Web3 world will elevate user experience to the next level.

Learn more about Phemex and Phemexia

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