A Candid Review of the New McafeeDEX
In this article, we provide the low-down on John McAfee’s latest promotional item, his own decentralized exchange (DEX). Like most of his offerings, he’s talked up a big game about it, but is it really all that? We review the pros and cons for you to make up your own mind.
A Candid Review of the New McafeeDEX
If you have been a fan of cryptocurrency for any considerable period of time, no doubt you have heard of John McAfee, inventor of the McAfee antivirus software and self-appointed crypto media spokesman. McAfee first became interested in crypto in 2016, and by 2017 he was marketing ICOs to his horde of loyal Twitter followers (of which he now has over 1.1 million). In July of that year, McAfee made a bold bet with himself that the price of BTC would reach $500,000 within 3 years, later doubling down on that bet, upping his target price to $1 million per coin by the end of 2020.
Love him or hate him (as he certainly is a divisive figure), McAfee has made a few noteworthy developments in the crypto industry, including leading a company that developed a new type of hardware wallet which is touted “ultra secure” (albeit a slight downgrade from the title of “unhackable” which it once claimed). He certainly is responsible for helping to usher in a new crowd of users into the cryptocurrency space, and his latest development, the McafeeDEX, is likely to help continue this trend.
Can you trust https://t.co/HdSEYi9krq?
We hold no funds at any time. You interact with smart contracts on the Blockchain – your funds are always secured. You use your own authorized wallet. No fear of bad management or owners – there are no owners.
There is no trust needed.
— John McAfee (@officialmcafee) October 11, 2019
A DEX, short for decentralized exchange, is an alternate form of cryptocurrency exchange in which funds and trading is not controlled by any one individual or group but rather a series of smart contracts. The potential benefits for this type of exchange are huge because traders no longer have to rely on the security practices and integrity of 3rd party exchanges when entrusting an exchange with their funds. The timeline of working DEX products is as follows:
- NXT (2013)
- Counterparty (2014)
- Bitshares (2014)
- NEM (2015)
- OmniDEX (2016)
- WAVES (2016)
- Etherdelta (2017)
- Bancor (2017)
- Forkdelta (2018)
- McafeeDEX (2019)
The idea has been around for a while, but throughout its 6 year history, has been plagued with technical inconveniences and inconsistencies. Failing trade orders, funds being permanently lost, and even hackings (such as in the case of Bancor) have led to much skepticism among cryptocurrency traders, and adoption has suffered as a result. All DEXs combined currently represent only a sliver of the total trading volume of the cryptocurrency market, though as the functionality of DEX technology and consistency in user experience improves, it’s likely that this type of exchange will gain much more popularity in the future.
McAfee’s DEX in particular has the chance to really switch the crypto community on to the idea of using decentralized exchanges. In a series of tweets written over the past few weeks, McAfee has stressed certain aspects of his exchange which he believes makes it a valuable asset to crypto traders. For one, it does not require Know Your Customer (KYC) or Anti-Money Laundering (AML) information from its customers; a move which may land him in some hot water with the regulatory agencies of the United States, but it’s been a while since McAfee has seemed to care about that sort of thing.
The SEC will come down hard on me for my Wild Wild West exchange in the Crypto World, but there is nothing to shut down. Our technology is the the smart contracts forever residing on the blockchain. https://t.co/HdSEYi9krq is just a window into it. And open source. So f*ck them!
— John McAfee (@officialmcafee) October 8, 2019
Another thing McAfee uses to promote his exchange is the idea that anyone can run their own “portal” of the exchange by paying a fee of $395. They simply need to have their own domain on which to host the exchange and can receive 0.05% of transactions coming through their portal as income for hosting. Having the same exchange hosted across multiple domains would thus lend to the robustness of the exchange and make it harder for it to be shut down or suffer from a DDOS attack.
In short, McAfee is tying in the value of his exchange with his libertarian viewpoints in that no government should be able to tell people what they can or can’t trade, or if they should even be allowed to trade in the first place. This idea harkens back to the olden days of crypto exchanges, before KYC or AML were terms used in the industry, and is actually a breath of fresh air in an era where governments are now keen on the idea of monitoring every aspect of a trader’s operations.
American Government regulators have turned us into a virtual Third Reich. Is it my job to be a policeman for the Government? To monitor and report on what people passing through my DEX are doing? If they want me to that they can offer me the job, for money, and I can turn it down
— John McAfee (@officialmcafee) October 8, 2019
But despite all of the big talk by John, how does the exchange itself actually hold up? We decided to take it for a test spin to see what it was all about, and if we could determine if it had potential to be the “next big thing” as far as cryptocurrency exchanges are concerned. For starters, the only coins that can be traded right now are ETH and Ethereum-based tokens, though McAfee has stated several times that he has plans to supports “multiple blockchains” in future versions of McafeeDEX. Here is a screenshot of the exchange home page, which looks similar in layout to Etherdelta (it automatically defaults to a trade pairing of ESH-ETH, for us, anyway):
- Pairings (Select Market): All tokens are traded among 4 different pairings: ETH, DAI (dollar-backed stablecoin), WBTC (“wrapped BTC”) and TUSD (TrueUSD, another stablecoin pegged to the dollar). The exchange already has a massive amount of pairings, even if most of them have zero liquidity or trades performed on them.
- Add Token: Any ETH token can be added to the exchange quickly, and for free. This feature sets it apart from other ETH-centric DEXs like Etherdelta (tokens can be added for free, but not easily) and Bancor (tokens can be added easily, but not for free). Only a couple of weeks after launch, McafeeDEX has already been inundated with a vast array of tokens.
- Whitelist: For a one-time fee of $85, you can use the exchange free of fees, which is currently 0.25% for taker fees (and 0% for maker fees). If you are a heavy trader that plans to stick with the exchange for a long time (and stick with using a single ETH address as well), this may eventually pay off for you, but we can’t recommend it as the exchange itself is still in beta testing and almost completely devoid of trading volume.
- Whitelist Checker: Links out to a website where you can check if an ETH address has already been whitelisted.
- Connected ETH address: After connecting your McafeeDEX page to MetaMask, your ETH address appears in the right corner of the menu bar. We only experiment with connecting via MetaMask, as that is the default option; however it is also possible to connect with a Ledger Nano S or by importing an Ethereum address along with its private key.
Much like Etherdelta, the trading screen itself is a bit clunky and non-intuitive, but once you practice make a trade or two and learn the basics it becomes pretty easy to use. The trading screen is divided into 5 segments: Trade (Buy/Sell), Order Book, Charts, Orders, and Trade History. These are pretty standard components for any exchange screen and do not require much explanation if you have any kind of crypto trading experience. It should be noted that since the exchange is still quite new, most of the time a chart will not be shown (as not enough trading history has accrued in order to form a chart for most tokens as of the writing of this article).
- No KYC. Anybody is free to use McafeeDEX at any time.
- Low trading fees. Though higher than most traditional exchanges, McafeeDEX’s 0.25% trading fee is still lower than that of Etherdelta and Forkdelta.
- Huge selection of tokens. Any Ethereum token you want to trade is listed, or can be listed.
- Almost zero trading activity. We took a look at pairings for some of the biggest Ethereum tokens, such as BNB, HT, BAT, and HEDG, and found that none of them had any trade history whatsoever. There may be tokens (other than the default, ESH) that have active trades and a spread within 10% of buy/sell orders, but we couldn’t find them.
- Hard to navigate. Although you can perform a search to find the token you want to trade, there is no way of knowing if it has any volume until you click on it. Don’t bother scrolling through the token pairings as there’s too many, and if you want to get back to the search function, you’ll have to wheel your mouse all the back to the start.
- Slow. Loading the site frequently times out or take an excruciating amount of time.
While many of McafeeDEX’s problems could be seen as growing pains suffered by any newly-launched exchange, it sure looks like a ghost town at the moment. Almost nobody seems to be using it. For being one of the loudest, most self-impressed voices in the crypto industry (which is saying a lot as he is up against some pretty fierce competition), you’d think John McAfee could have enticed far more participants to join his latest venture.
Perhaps real change is slow. Perhaps the kinks have yet to be worked out and everybody is too set in their normal routine. Whatever the problem is, it doesn’t seem like McAfee is making a dent in changing the community’s collective mind about using a DEX. Oh well. He’ll have bigger problems to worry about if the year 2021 happens and BTC hasn’t reached $1 million in price. Maybe by then we’ll be able to find some actual volume on his DEX.