{"id":125613,"date":"2025-03-22T15:19:21","date_gmt":"2025-03-22T15:19:21","guid":{"rendered":"http:\/\/cryptospotters.net\/?p=125613"},"modified":"2025-03-22T15:19:21","modified_gmt":"2025-03-22T15:19:21","slug":"centralized-exchanges-kodak-moment-time-to-adopt-a-new-model-or-stay-behind","status":"publish","type":"post","link":"http:\/\/cryptospotters.net\/?p=125613","title":{"rendered":"Centralized exchanges\u2019 Kodak moment \u2014 time to adopt a new model or stay behind"},"content":{"rendered":"

Source: Cointelegraph.com NewsOpinion by: Ido Ben Natan, co-founder and CEO of Blockaid
\nCentralized exchanges (CEXs) have controlled what people can trade for years. If a token wasn\u2019t listed on major exchanges, it didn\u2019t exist for most users. That system worked when crypto was small. But today? It\u2019s completely broken.
\nThe rise of Solana-based memecoins, the popularization of projects like Pump.fun and developments in AI-driven token creation are driving the creation of millions of new tokens each month.\u00a0
\nExchanges have not evolved to keep up. That must change. Coinbase CEO Brian Armstrong recently weighed in on the topic, saying that exchanges must shift from an allowlist model to a blocklist model, where everything is tradeable unless flagged as a scam.
\nIn many ways, this is the Kodak moment for CEXs. Kodak\u2019s failure to adapt to digital photography has made it a poster child of failed strategy. Now, exchanges are faced with the same threat. The old way of doing things isn\u2019t just slow \u2014 it\u2019s obsolete. The real question is: What comes next?
\nThe old model is holding exchanges back
\nCEXs were initially built to make crypto feel safe and familiar. They modeled their approach after traditional stock markets \u2014 carefully vetting every token before it could be listed. This system was designed to protect users and keep regulators happy. Crypto, however, does not function like the stock market.
\nUnlike stocks, which require months of filings and approvals before going public, anyone can create a token instantly. Exchanges simply can\u2019t keep up. The recent launch of the TRUMP coin is a great example. It launched on Jan. 17 and immediately skyrocketed in value, but by the time it had been listed on significant CEXs, it was already past its peak.
\nRecent: Bybit hack a setback for institutional staking adoption: Everstake exec
\nFor exchanges, this isn\u2019t just an efficiency problem \u2014 it\u2019s a fight for survival. The rules they were built on don\u2019t fit crypto\u2019s reality anymore. To compete, they must reinvent themselves before the market leaves them behind.CEXs shouldn\u2019t fight DEXsInstead of fighting to preserve outdated listing processes, exchanges should embrace the open access of DEXs while retaining the best parts of centralized trading. Users simply want to trade, regardless of whether an asset is officially \u201clisted.\u201d The most successful exchanges will remove the need for listings altogether. Listing tokens faster is not enough when the future is an open-access model.
\nThis new generation of exchanges won\u2019t just list tokens \u2014 they\u2019ll index them in real-time. Every token created onchain will be automatically recognized, with exchanges sourcing liquidity and price feeds directly from decentralized exchanges (DEXs). Instead of waiting for manual approvals, users will have access to any asset the moment it exists.
\nAccess alone isn\u2019t enough \u2014 trading has to be seamless. Future exchanges will integrate onchain execution and embedded self-custody wallets, enabling users to purchase tokens just as easily as they do today. Features like magic spend will enable exchanges to fund self-custodial accounts on demand, converting fiat into the required onchain currency, routing trades through the best available liquidity and securing assets without users needing to manage private keys or interact with multiple platforms.
\nNothing will change from the user\u2019s perspective \u2014 but everything will be different. A trader will simply click \u201cbuy,\u201d and the exchange will handle everything in the background. They won\u2019t know if the token was ever \u201clisted\u201d in the traditional sense \u2014 they wouldn\u2019t need to know.
\nThe biggest roadblock is security
\nShifting from an allowlist to a blocklist is the first step toward a more open-access model for CEXs. Rather than deciding which tokens users can trade, exchanges would only block scams or malicious assets. While this shift makes trading more efficient, it also presents significant security and compliance challenges. Threats will constantly test the system, and effective protections must be implemented.
\nRegulators expect CEXs to enforce compliance more strictly than DEXs. Removing manual listing will require real-time monitoring to halt transactions involving high-risk assets or illicit activity. Security cannot be reactive; it must be proactive, near-instant and automated. Open-access trading may be too risky for users and exchanges without this foundation.
\nThe future is open
\nThe way CEXs operate today isn\u2019t built for the future. A manual approval process for token listings doesn\u2019t scale, and as DEXs continue to gain ground, the old model is becoming a competitive disadvantage.
\nThe logical next step is moving to a blocklist model, where all tokens are tradable by default except those flagged as malicious or non-compliant. To survive, CEXs should work to replace slow, manual reviews with real-time threat detection, onchain security monitoring and compliance automation.
\nThe exchanges that get this transition right \u2014 the ones that integrate security at the core of an open-access model \u2014 will lead the next era of crypto. The ones that don\u2019t? They\u2019ll be left trying to compete with DEXs while still using a system that no longer fits the market.
\nOpinion by: Ido Ben Natan, co-founder and CEO of Blockaid.
\nThis article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author\u2019s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.Read More<\/a><\/p>","protected":false},"excerpt":{"rendered":"

Source: Cointelegraph.com NewsOpinion by: Ido Ben Natan, co-founder and CEO of Blockaid Centralized exchanges (CEXs) have controlled what people can trade for years. If a token wasn\u2019t listed on major… <\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[5],"tags":[],"_links":{"self":[{"href":"http:\/\/cryptospotters.net\/index.php?rest_route=\/wp\/v2\/posts\/125613"}],"collection":[{"href":"http:\/\/cryptospotters.net\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/cryptospotters.net\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"http:\/\/cryptospotters.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=125613"}],"version-history":[{"count":0,"href":"http:\/\/cryptospotters.net\/index.php?rest_route=\/wp\/v2\/posts\/125613\/revisions"}],"wp:attachment":[{"href":"http:\/\/cryptospotters.net\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=125613"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/cryptospotters.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=125613"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/cryptospotters.net\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=125613"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}