Cointime

Cointime

Download App
iOS & Android

Why Are Decentralized Exchanges So Important & How Users Can Use Them?

Most people in the world today must be familiar with cryptocurrencies. In addition to the existence of a new instrument for digital financial transactions, there are a number of other factors that make people interested in cryptocurrencies. However, people would require a cryptocurrency exchange for trading with cryptocurrencies.

Interested in buying or selling Crypto?

Once you’ve decided you want to trade some Bitcoin, Ethereum, or another cryptocurrency, you’ll need to create an account on a crypto trading platform to exchange your U.S. dollars/ Rupee (or other currency) for digital assets.

So, if you are someone who wants to invest & hold crypto or has a business that deals with crypto financial transactions, read further to know the full picture!

What are Crypto Exchanges?

Cryptocurrency exchanges are the platforms that facilitate the trading of cryptocurrencies for other crypto assets and NFTs.

And here, we have two types of platforms - Centralized Cryptocurrency Exchanges (CEX) and Decentralized Cryptocurrency Exchanges (DEX).

Centralized Cryptocurrency Exchanges (CEX)

Centralized cryptocurrency exchanges act as an intermediary between users -both -buyer and seller and make money through commissions and transaction fees. You can imagine a CEX to be like a stock exchange but for digital assets.

But, the market has witnessed increasing risks with CEXs managing the crypto exchanges, including:

Large exchanges hold dollars worth of crypto, making them a target for hackers and theft.

Centralized exchanges often charge high transaction fees for services.

Most CEXs will hold the user’s i.e. your digital asset, as a custodian in their digital wallets rather than allowing you to store your private keys on your digital wallet. And this can cause fraud!

With the above disadvantages of CEX coming into the light, users need Decentralized Exchange platforms for fair trade!

Decentralized Cryptocurrency Exchanges (DEX)

A decentralized exchange is another type of exchange that allows peer-to-peer transactions directly from the user’s digital wallet without going through an intermediary.

Examples of DEXs include PancakeSwap, Uniswap, dYdX, and Kyber.

Decentralized exchanges work by using smart contracts (self-executing pieces of code on a blockchain)- to fulfill orders placed by end users/traders, allowing users to trade directly with each other.

This allows for more privacy and less slippage (transaction costs) than a centralized cryptocurrency exchange.

Now that you have understood the basics of cryptocurrency exchanges, even if CEXs are regulated, with recent market fluctuations, CEXs are struggling to survive. However, DEXs are the ones that people are turning to! What do DEXs offer to users? Let’s find out.

Why are Decentralized Cryptocurrency Exchanges so Important to Users?

Users or people who are actively trading want an alternative to secure transactions. That is the reason DEXs are becoming increasingly popular! Plus, DEXs have these outstanding benefits:

Users have total custody of their assets

Protects users from fake trading

Offers you the complete privacy

Want to be a part of DEX as a user? Look at how easy it is.

How can Users Operate on Decentralized Exchanges?

To become a user, you just need to get to a DEX through the use of a dApp (Decentralized Application) by a web browser. A DEX usually has a URL where you can directly access your crypto wallet. After connecting to it, a user can start interacting with the dApp & can start trading via the exchange.

Users can perform a variety of operations with digital funds:

Lending and borrowing

Exchanging

Trading

Earning interest

Insuring

The best part??!

There is no need to create a separate profile or provide KYC-background information as you would typically have to do when opening a bank account or traditional centralized exchange account.

Final Thoughts

Users need to research good Decentralized Exchange platforms to perform digital trade smoothly & with trust that they can hold the cryptos in this ecosystem in a secure way.

But, there is also the need for businesses that deal with digital trade & crypto to have a good & secure Decentralized Exchange platform for their users’ satisfaction.

Comments

All Comments

Recommended for you

  • Hong Kong Monetary Authority launches industry consultation on “renaming virtual banks as licensed digital banks”

    Hong Kong virtual banks released their annual reports for 2023 last week. The eight virtual banks collectively lost about 2.99 billion yuan last year, a decrease of about 12% compared to the total loss of about 3.4 billion yuan in 2022. In response to the occasional feeling of "unreality" brought about by the term "virtual" in recent years, the Hong Kong Monetary Authority has initiated a consultation on renaming with the eight virtual banks, the Hong Kong Bankers Association, the Hong Kong Restricted Licensed Banks and Deposit-taking Companies Association, with the aim of renaming virtual banks as licensed digital banks, for a period of one month. It is reported that in the Asian region, similar banks have different names in different places. South Korea and Singapore issue licenses under the name of "digital bank", with Singapore further dividing them into digital full banks (DFB) and digital wholesale banks (DWB).

  • Chairman of the Russian State Duma Financial Market Committee: I do not support a complete ban on the circulation of cryptocurrencies in Russia

    Anton Gorelkin, Chairman of the Financial Market Committee of the Russian State Duma, said that he does not support a complete ban on the circulation of cryptocurrency in Russia. He explained in a post on Telegram that this restriction is not intended to ban the use of all cryptocurrencies, but rather to regulate the establishment of cryptocurrency exchange platforms within the legal framework of Russia. Anton Gorelkin also believes that the establishment of a legitimate cryptocurrency infrastructure in Russia is influenced by geopolitical realities, and this requires consideration of factors related to international relations. He further added that allowing such infrastructure may expose Russian companies to Western sanctions. In addition, Anton Gorelkin pointed out that this restriction may be lifted in the future, and users can still use foreign cryptocurrency exchanges and over-the-counter trading services as before. However, the impact on many over-the-counter cryptocurrency services in Moscow is still uncertain.

  • Ethereum L2 TVL is $39.98 billion, of which Base TVL is $5.57 billion

    According to L2BEAT data, the current Ethereum Layer2 TVL is $39.98 billion, with a 7-day increase of 0.69%. The top five TVLs are:

  • Hong Kong Exchanges and Clearing Limited: The total market value of Bitcoin and Ethereum futures ETFs reached HK$1.2 billion in the first quarter, with an inflow of HK$592 million

    According to data disclosed by Brian Roberts, head of securities product development at the Hong Kong Stock Exchange, shows that after the approval of virtual asset futures ETFs for public offering in Hong Kong by the China Securities Regulatory Commission on October 31, 2022, three virtual asset futures ETFs investing in Bitcoin and Ethereum futures were listed on the Hong Kong Stock Exchange. Since their launch, these ETFs have been popular with investors and have a high trading volume. The daily trading volume has increased from HKD 8.9 million in 2023 to HKD 51.3 million in the first quarter of 2024, and they have also attracted HKD 529 million in capital inflows. As of the end of March 2024, the total market value has reached HKD 1.2 billion, an annual increase of 255%.

  • Cryptocurrency market financing totaled $1.02 billion in April, involving 161 financings

    On May 6th, it was reported that the total financing amount in the cryptocurrency market in April reached 1.02 billion US dollars, involving 161 financing deals. This is slightly lower than the total investment of 1.09 billion US dollars in March, which had 186 deals. However, cryptocurrency venture capital has exceeded 1 billion US dollars for the second consecutive month this year, marking the first time since the end of 2022 for the industry.

  • The total open interest of ETH contracts increased to $10.68 billion

    According to Coinglass data, the total open positions of ETH futures contracts on the entire network are 3.39 million ETH, equivalent to approximately 10.68 billion US dollars. Among them, the open positions of Binance ETH contracts are 1.16 million ETH (approximately 3.64 billion US dollars), ranking first.

  • Suspected MakerDAO multi-signature wallet deposited 750 MKR to Binance 2 hours ago

    According to Spot On Chain monitoring, MakerDAO has been depositing MKR into CEX. Two hours ago, the multi-signature wallet 0xbba (possibly MakerDAO) deposited 750 MKR (approximately $2.19 million) at an average price of $2920 to Binance.

  • BASE network TVL exceeds $1.5 billion

    According to DefiLlama data, BASE Network TVL is currently at $1.527 billion with a 24-hour increase of 0.53%. The top three ecological protocol TVL rankings are as follows: Aerodrome TVL reached $670 million with a 7-day decrease of 7.5%; Uniswap TVL reached $228 million with a 7-day decrease of 3.52%. ExtraFinance TVL reached $104 million with a 7-day decrease of 8.25%;

  • ZeroLend will open ZERO airdrop claims on Linea at 15:30 on May 6th, and will take a snapshot closer to TGE

    On May 6th, ZeroLend, a decentralized lending protocol, announced that ZERO airdrop claiming will be opened on Linea at 15:30 on May 6th, and ZERO trading will be opened at 16:00. The Zero Gravity points and earlyZERO (1 earlyZERO = 1 ZERO) accumulated by users will be automatically converted to ZERO and displayed on the reward page. In terms of airdrop distribution, ZeroLend will distribute 18% of the token supply to the community, of which 5% will be allocated to Zero Gravity participants and 13% will be allocated to earlyZERO holders. ZeroLend stated that a snapshot will be taken near TGE. ZERO stakers will receive voting rights, staking rewards, and potential future airdrops based on their voting power. If staked for more than 1 year, a staking bonus of 5%-20% can be obtained.

  • It is estimated that there are about 28 days left before ETC production cuts

    Data shows that Ethereum Classic (ETC) is expected to undergo a reduction in production on June 3, 2024, which is about 28 days and 6 hours away. The current block reward is 2.56 ETC, and after the reduction, it will be 2.048 ETC.

Daily Must-Read

Popular Activities

Delysium $AGI & AI Private Yacht Party

Delysium $AGI & AI Private Yacht Party

March 27 - March 27
Seoul

Popular Tags

Cointime
News
Contents
RSS
Company