Onchain Crypto Exchanges refer to decentralized platforms that execute trades directly on a blockchain, leveraging smart contracts rather than centralized order books or custodians. This contrasts with traditional centralized exchanges (CEXs) like Coinbase or Binance, which handle transactions offchain and custody user funds.
The panel likely explored how DeFi is evolving to bring exchange functionality onchain, driven by Layer 2 Scaling solutions like Arbitrum, Optimism, and rollups (e.g., zkSync) reduce transaction costs and latency, making onchain trading viable. Coinbase’s Base, a Layer 2 built on Optimism’s OP Stack, exemplifies this shift, and Phil Girard, a Coinbase director, probably highlighted its role.
Interoperability: Protocols like LayerZero, led by Bryan Pellegrino, enable seamless cross-chain communication, allowing assets and data to move between blockchains without intermediaries. This is key for onchain exchanges to aggregate liquidity across ecosystems.
Register for Tekedia Mini-MBA edition 16 (Feb 10 – May 3, 2025) today for early bird discounts.
Tekedia AI in Business Masterclass opens registrations.
Join Tekedia Capital Syndicate and co-invest in great global startups.
Register to become a better CEO or Director with Tekedia CEO & Director Program.
User Experience (UX): Projects like Backpack Exchange (Armani Ferrante’s venture) and Morpho (represented by 0xloth) focus on simplifying DeFi interactions, abstracting away blockchain complexity to rival CEXs in usability.
Pellegrino’s Quote and Abstraction
Bryan Pellegrino, CEO of LayerZero Labs, is a vocal advocate for abstraction in blockchain UX. His statement, “Users shouldn’t have to worry about chains or gas—what they need is abstraction,” reflects LayerZero’s mission and the industry’s direction. Users currently juggle multiple blockchains (Ethereum, BNB Chain, Solana, etc.), each with distinct wallets, tokens, and fees.
LayerZero’s omnichain protocol uses Ultra Light Nodes (ULNs) to verify cross-chain messages onchain, enabling applications to operate across ecosystems without users manually bridging assets. For exchanges, this means unified liquidity pools—trade ETH on Ethereum for SOL on Solana without leaving the platform.
Gas: Transaction fees (gas) deter mainstream adoption, especially on Ethereum’s Layer 1, where costs can spike during congestion. Abstraction here involves gasless transactions—either via meta-transactions (third-party fee sponsorship, as in EIP-7702) or Layer 2s, where fees drop to cents. Pellegrino likely tied this to LayerZero’s support for gas abstraction, letting apps handle fees behind the scenes.
Abstraction: This buzzword means hiding blockchain complexity from users. For onchain exchanges, it’s about delivering a CEX-like experience—fast trades, no seed phrases, no chain selection—while retaining DeFi’s trustlessness. LayerZero’s generic messaging (beyond asset transfers) supports this by enabling dApps to sync state and logic across chains, creating a seamless frontend.
Pellegrino’s view aligns with LayerZero’s tech: a messaging layer that abstracts chain-specific details, letting developers build exchanges where users just click “trade” without wrestling with RPCs or gas limits. At ETHDenver, he might’ve contrasted this with clunky bridges (e.g., Wormhole’s past exploits) or CEX vulnerabilities (FTX’s 2022 collapse), emphasizing trustless abstraction as the future.
Phil Girard (Coinbase): Discussed Base’s role in onboarding users to onchain trading, leveraging Coinbase’s infrastructure. Base’s low fees (sub-1-cent transactions) and OP Stack integration could’ve been pitched as a scalable foundation for exchanges.
Armani Ferrante (Backpack Exchange): Backpack, a Solana-based exchange, emphasizes speed and UX. Ferrante might’ve argued for high-throughput chains as the backbone for onchain trading, with abstraction layered on via wallets or APIs.
0xloth (Morpho): Morpho, a lending protocol transitioning to a full DeFi stack, could’ve tied exchange shifts to liquidity optimization. Abstraction here might mean integrating trading with lending/borrowing seamlessly onchain.
Margaux Nijkerk (CoinDesk): As a seasoned crypto journalist, Nijkerk likely pressed on challenges—centralization risks in abstracted systems, regulatory hurdles, or scaling pains—grounding the discussion in real-world stakes.
As of March 2, 2025, DeFi’s total value locked hovers around $100 billion (per recent trends), with onchain exchanges like Uniswap and Curve growing but still dwarfed by CEX volumes. The6 panel likely positioned abstraction as the tipping point—making DeFi as intuitive as Coinbase while keeping self-custody. Pellegrino’s LayerZero, with its $3 billion valuation (2023) and cross-chain dominance, is central to this vision.