- 1 Key facts you need to know about Decentralized Crypto Exchanges
- 1.1 What is Decentralized Crypto Exchanges (DEXs)?
- 1.2 Why should you go for Decentralized Crypto Exchanges?
- 1.3 Advantages
- 1.4 Disadvantages of using DEXs
- 1.5 The conclusion
Key facts you need to know about Decentralized Crypto Exchanges
Decentralized Cryptocurrency Exchanges are the Main platform, where you can trade digital coins easily. It’s just another example of the stock market, just the way, the stock market shows the charts of stocks. Crypto Exchange deals with the virtual trade of assets. most of the investors are getting interested in Crypto Exchange, So it needed to decode the types of Crypto Exchanges.
What is Decentralized Crypto Exchanges (DEXs)?
So as the name seems Decentralized, that means It has got no third-party interference.
Decentralized cryptocurrency exchanges allow users to do peer-to-peer (P2P) transactions, Whole process is on an automated contract. All decentralized crypto exchanges are not the same in their infrastructure.
Some popular DEXs include the following, Venus, Tokenlon, 0x Protocol, and Uniswap (V2).
Why should you go for Decentralized Crypto Exchanges?
If you are looking for complete privacy, then Definitely should go for (DEXs), since it works fully anonymous. While Centralized Exchanges can ask for Know-Your-Customer (KYC) details.
Privacy is the main shining factor for it. It doesn’t ask you for any ID verification.
2. It’s comparatively low-cost.
Centralized Exchanges can cost additional charges of setting things up and maintenance. They have this kind of infrastructure so they can offer you secured services, while, decentralized crypto exchanges work on simple rules of self-regulation and automation and which makes it more low-cost comparatively. This type of system can remove all the additional charges for you.
3. Less Hacking risk involvement.
If you are an investor and worried about hacking issues, then DEXs is the best option for you to go for. Since there is no third-party involvement in DEXs and also you don’t have to exchange your assets with any third party. This makes the system fully secure and has fewer risks of hacking.
4. More control over your Money.
You have full access control over your funds and wallet. To do any transaction, it doesn’t ask you to transfer funds to another wallet or any trading accounts.
Disadvantages of using DEXs
1. Limited Speed Transactions.
Every Transaction that you will perform, takes time to be checked fully and validated on the blockchain network. Speed is based upon network miners, not exchange. It works the network’s miners.
2. Limited Functionality for Traders.
Due to their recent launches and DEXs are ready to be operated. Their best focus is simple to buy and sells orders, Many users may find it odd. They will be missing out on some great features like stop losses, margin trading, and lending.
Even having these advantages, there are more drawbacks of decentralized exchanges which include a lack of technical knowledge needed to interact with these exchanges. it has other vulnerabilities and unvetted token listings.
3.Specific knowledge is required
DEXs are easily accessible for cryptocurrency wallets, they also understand security concepts to heap their funds more secured.
Wallets need to be funded with the right tokens for every network. Without network’s native token. funds may get stuck.
Decentralized Crypto Exchanges is a trustworthy solution, which allows users to buy and sell their digital currencies, without interference from third-party so it has become more secure with fewer hacking risks.
DEXs will continue to develop and become more useful for users. The main focus point of DEXs to look at siphon liquidity from the different markets.