Decentralized Exchange (Dex)
| Decentralized exchanges (DEXs) are a type of cryptocurrency exchange that does not rely on a third party to hold the customer’s funds. Instead, trades are facilitated directly between users (peer-to-peer) through an automated process. This type of exchange is often lauded for its increased security, as funds are not held by a central entity that could be hacked or go bankrupt. In addition, DEXs often have lower fees than their centralized counterparts. However, DEXs are not without their drawbacks. Because they are decentralized, they are often less user-friendly than centralized exchanges. In addition, DEXs can be subject to high volatility and low liquidity, as there are often fewer users trading on the platform. |
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