xxxNifty ($NSFW) AMA 7/8 Recap | NSFW Now Trading on LBank | CEX vs. DEX Discussion
Welcome to the recap of today’s AMA Discussion.
You can listen to a recording of the Voice AMA on YouTube here: https://youtu.be/1o7CbsFg8CU
Today’s topic of discussion was mainly around our new listing on LBank (Centralized Exchange), and how that varies from a DEX (Decentralized Exchange) such as PancakeSwap.
There seems to have been a lot of confusion within the community mainly surrounding these three questions:
- Why is the price of NSFW different on PancakeSwap than on LBank?
- Why is the price higher on CoinGecko and CoinMarketCap than on PancakeSwap?
- Will we receive reflections from the volume on LBank?
Let’s address these questions one by one:
- Why is the price of NSFW different on PancakeSwap than on LBank?
There is a price difference amongst all tokens/cryptocurrencies on different exchanges. This is due to the fact that they operate independently of each other. You will see that as volume increases the prices will begin to converge, as big price fluctuations allow for people to arbitrage (Buy on the exchange with a lower price, and immediately go sell on the exchange with the higher price). This practice will lead to the prices going closer to equal.
In a DEX, such as PancakeSwap, when you buy and sell tokens, you are directly dealing with the liquidity pool on the blockchain. With a CEX, you are dealing directly with other buyers and sellers, and there is a market maker there to facilitate order flow.
- Why is the price higher on CoinGecko and CoinMarketCap than on PancakeSwap?
Now that both CoinGecko and CoinMarketCap show data for LBank, you may notice the difference in price per token on these two platforms than what is reflected in your wallet, or PooCoin. This is because both platforms are averaging out the data from PancakeSwap and LBank — it may be slightly higher or lower, depending on the price point on the exchanges.
- Will we receive reflections from the volume on LBank?
Because transactions that occur within a CEX on not occurring directly on-chain, there is not the automatic reflection you would receive from transactions on a DEX, which happens on the blockchain. With that being said, LBank does offer reflections on transfers that occur (ex. If someone transfers NSFW into the exchange, or out of the exchange, this will trigger the reflections to happen directly on the blockchain. Currently, all CEX’s operate in this manner, as when you buy a token on a CEX, the tokens are not actually transferred to you, rather they are logged on the CEX’s database. The transaction is logged on the blockchain when you withdraw the tokens out of the exchange.
Hopefully, this helps clarify some of the confusion that people had, mainly surrounding price discrepancies amongst the two exchanges.
There were several other questions asked by the community, which you can listen to on the recording of the AMA here: https://youtu.be/1o7CbsFg8CU
If you have any questions, feel free to contact us on any of our community channels.
Thank you!
The xxxNifty Team
Useful Links:
xxxNifty Website: xxxNifty.com
Buy $NSFW Tokens: https://exchange.pancakeswap.finance/#/swap?outputCurrency=0x9daaa05946e486add2c81e0d32d936866b8449d9
Buy $NSFW on LBank Exchange: https://www.lbank.info/exchange/nsfw/usdt
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