Traditionally, decentralized currencies have dominated. However, with the rapid development of technology, finally various tools for running decentralized trading called DEX have emerged.
Actually, the system between decentralized exchanges or also known as DEX when you transact crypto assets as usual is the same. The difference is, in DEX trading you don’t need to register and KYC first. DEX trading utilizes a blockchain network where transactions occur between two digital wallet owners i.e. seller and buyer directly, as the name implies, decentralized or not centralized.
The DEX market is primarily a peer-to-peer system where crypto traders carry out transactions directly without handing over the management of their funds to intermediaries or custodians. These transactions are facilitated through the use of self-executing agreements written in code called smart contracts.
The DEX was created to remove the requirement of any authority to supervise and authorize trades made within a particular exchange. Decentralized exchanges allow peer-to-peer (P2P) crypto trading.
Peer-to-peer refers to a marketplace that connects crypto buyers and sellers. They are usually non-custodial which means the user retains control of their wallet’s private key. A private key is an advanced type of encryption that allows users to access their cryptocurrency. Users can immediately access their crypto balance after logging into the DEX with their private key. Users will not be asked to submit any personal information such as name and address, this is very good to respect their privacy.
The following are some examples of decentralized exchanges:
It was the first DEX to achieve a level of popularity and trading volume that rivals even some of the most well-known centralized exchange platforms.
PancakeSwap supports thousands of BEP-twenty tokens and also has its own governance token known as CAKE.
Curve was originally deployed on ethereum in 2017, but has since expanded to several other popular blockchains, including Avalanche, Polygon, and Fantom, as well as several layer-two solutions.