There were days when decentralized exchanges like IDEX were truly decentralized and we can trust them with our information. But now they are claiming themselves as DEX but have become more like a centralized exchange. Some DEX could change their terms over time, but majority of them still function in a highly decentralized manner. As you have said, there could be regulations pitching in from time to time but the XMR - BTC atomic swap could probably be a game changer of the industry when realized and when proved successful, there wouldn't be really a need for DEX in future transactions. OTOH, centralized exchanges like Binance do charge a hefty fee on its users during withdrawals and have a poor customer support for issues hence DEX could always prove to be an alternative to these highly expensive centralized exchanges.
If an exchange to function properly like Binance DEX, they should be regulating them properly so that there aren't really huge malicious transactions going through them.
If an exchange to function properly like Binance DEX, they should be regulating them properly so that there aren't really huge malicious transactions going through them.
There really isn't any decentralized exchange except for those which don't rely on a central server to work as intended. DEXs which are software-based and rely only on Blockchain tech, are the ones that will be able to stand the test of time. I'm talking about DEXs like Block DX and atomicDEX (this last one makes use of atomic swaps technology). Enforcing regulations on such exchanges is impossible, because they live on various computers spread around the world. No single government has jurisdiction in every country worldwide. While ETH-based DEXs live on the ETH blockchain, most of them (if not all) are hosted on centralized servers linked to centralized domains. Governments could easily take down the server the ETH DEX is hosted into, putting an end to them once and for all. While it'll still be possible to interact with an ETH-based DEX without a web interface, not many people are tech-savvy enough to do this.
Nonetheless, I believe that truly-decentralized exchanges will be able to go above the law. Once governments realize that their efforts to tackle such exchanges are in vain, they'll declare DEXs as "illegal". People that are caught trading on a DEX could face either fines or jail time. While truly-decentralized exchanges will still exist, their level of adoption will be extremely low as most people will be afraid of breaking the law. Who knows what holds for this industry as governments continue to impose heavy-handed regulations? Just my thoughts
