Decentralized exchange (DEX)
1. A decentralized exchange (DEX) is a cryptocurrency exchange which operates in a decentralized way, i.e., without a central authority. Decentralized exchanges allow peer-to-peer trading of cryptocurrencies.
2. Users do not need to transfer their assets to the exchange, decentralized exchanges reduce the risk of theft from hacking of exchanges.
3. Decentralized exchanges can also prevent price manipulation or faked trading volume through wash trading, and are more anonymous than exchanges which implement know your customer requirements.
4. There are some signs that decentralized exchanges have been suffering from low trading volumes and market liquidity.
5. Cryptocurrencies continues to gain popularity all over the world. Despite it’s high-volatility digital assets has a lot of advantages: anonymity, simplicity of cross-border payments, and of course decentralization.
6. But traders still have to use cryptocurrency exchanges which is extremely centralized.
7. In future world of digital money and peer-to-peer transactions you still have to trust your money to the third part.
8. That’s why decentralized exchanges or DEX was created and developed within last few years.
Due to a lack of KYC process, and no way to revert a transaction, users are at a loss if they are ever hacked for their passwords or private keys.