Hello Indodax members!
In today’s article, I want to discuss Decentralized Exchange. Have you heard of Decentralized Exchange yet? If you don’t know yet, let’s read this article!
The system between the Decentralized Exchange (DEX) and usual crypto-asset transactions is similar. The only difference, in DEX trading, you don’t need to register and KYC first. DEX trading uses a blockchain network where transactions occur between two digital wallet owners.
Since the initial launch of Bitcoin, the meeting between buyers and sellers of crypto assets has occurred because of the trading forum. Without a trading forum, it would be challenging to attract digital wallet users globally. The liquidity of crypto is likely to be worse than now, and there is also no way to agree on the price of digital assets properly. Over time, there have been new developments to run decentralized trading, commonly known as DEX, a place for trading cryptocurrencies where there is no need for an intermediary.
DEX allows crypto traders to hold each other’s keys while trading using liquidity solutions from order books to liquidity pools. However, not all DEXs use the same basic infrastructure. While some maintain the conventional order book model, some use emerging liquidity protocols. In addition to the exchange and liquidity protocols, developers build new aggregation tools to address the intermittent liquidity inherent in decentralized exchanges.
We’ve determined @TDB54566975’s direction: help us build an open platform to create a decentralized exchange for #Bitcoin https://t.co/jHYWHy1qmu
— jack (@jack) August 27, 2021
Advantages of DEX
The advantages of DEX other than only transacting between sellers and buyers, both parties do not require a KYC process or a third party. And also Open for crypto assets that are not listed on a centralized exchange that can still be traded on DEX.
Disadvantages of DEX
Although it has many advantages, DEX also has some disadvantages, such as being complicated when we use it. The trading volume on DEX is not as large as traditional exchanges, not as liquid as crypto assets on conventional exchanges, and costs are high during certain hours.
So, are you also interested in Decentralized Exchange (DEX)? Come on, write your comment in the comments section below! For those of you who have not registered at Indodax, you can visit this link.