Decentralized Exchanges 8 Things You Must Know

Decentralized Exchanges 8 Things You Must Know

What is the decentralized exchange, or DEX?


How does a decentralized exchange work?


Different between DEX and CEX.

S.N.DEXCEX
1Do not collect your data.Collect your data.
2You do not need KYC.Maybe you need KYC.
3They have no access to your crypto.They have full control of your crypto.
4Charge no fee for trading.Charge a fee for trading.
5It cannot be recovered if you lose your wallet key.Easily recover.
6Exchange with the current market.You can ask about your price.
7Probably all coins can be traded.Only listed can be traded.

Advantages of DEX.

  • It gives you the best privacy features. Unlike a centralized exchange, DEX does not need KYC to trade.
  • DEX is totally cheaper and charges no fees.
  • You have full control over your own money and only need confirmation during the trade.
  • No password or account is needed to start. It works like ready-to-eat food.
  • DEX gives you the current market price with the minimum slippage.
  • Any coin that you want to trade but cannot find on the centralized exchange can be available on DEX, or you can add it manually.
  • You don’t have to transfer your fund to an exchange, which reduces the theft risk.

Disadvantages of DEX.

  • Not good for beginner traders.
  • Can cause confusion between coins with the same name on a different blockchain.
  • We already told you that DEX does not charge any fees, but the blockchain and liquidity providers do, and that can be costly.
  • DEX asks for wallet access to read, send, and receive cryptocurrency, and that can be risky, so make sure you trust your DEX.
  • Some DEX accounts allow crypto staking that is connected to your wallet, so if you lose the secret key to your wallet, you will also lose your DEX account.
  • Help is not available if you lose your money or get into trouble, but yes, you can ask in the community; in reality, they are only users like you.
  • Low-liquidity coins can push you into trouble. Suppose you bought 100 coins, but you cannot sell them all.
  • Decentralized exchange works on smart contracts, and it checks both party transactions that can take time to validate.
  • DEX doesn’t have features like a centralized exchange, and you won’t feel like traders.

How to use DEX.

  1. The first thing you need is a decentralized wallet and an amount of crypto in it, mostly ETH and BNB.
  2. Find the crypto you want to trade. Make sure you know which type of crypto it is, like ERC20 or BEB20.
  3. Go to the DEX website and connect your wallet, or you can also connect to DEX within your wallet if your wallet support Dapp.
  4. Now search for your coin, enter the amount, and click swap.
  5. After a few minutes, your coin will arrive in your wallet.

Types of decentralized exchange.



Conclusion.

Abhishek Rajbhar Avatar

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