Greetings everyone, I hope you all are doing well in this bear market phase. I have a question, from where do you buy cryptocurrencies both for trading and investing?

99% of you would be answering any centralized exchange like Binance, Huobi Global, WazirX, or any other like this which is under the control of some entity and have authorities behind the exchange handling your funds and transactions. well, they are good in the real world but if you see theoretically what is cryptocurrency developed for?

To take power from higher authorities and distribute it to the people, in one word is called "DECENTRALIZATION". Now ask yourself, are the exchanges you using decentralized?
The answer in most cases would be no, as they would be centralized exchanges earlier said.

Keeping this thought in mind and following the true meaning of Cryptocurrencies and thus decentralization, DEXs WERE INTRODUCED.

DEXs, what are these?

DEX stands for Decentralized Exchange, the crypto trading platform which are not under the control of a single entity and therefore the community runs it. Do they work differently than centralized exchanges?

Obviously yes but the result you would be getting is the same, the main difference would be you will not be using a service controlled by a higher authority as you do in centralized exchanges. There are obvious merits and demerits of using DEXs over CEX (Centralized exchanges) which we would be discussing very soon.

DEX Features.

If you use Binance or any other exchange, usually you would be seeing an option there "Staking", this is where you give your crypto for processing the transactions and you earn a reward or say commission for helping the network to do the transactions. If you go to a Defi Platform like Pancakeswap, there you would be seeing Defi Staking, the concept here works the same but the difference comes in the rewards you would be getting and time duration like in CEX staking, you have to permanently lock your crypto for 30 days, 60 days and so on as per your choice but in defi staking, you can pull out the money you put in at any point of time but this feature results in the decrement of rewards.

Additionally, you will find Liquidity farms and Pools to stake your crypto in pairs like in the BNB-CAKE pair. There are many other such pairs and the good thing is that they are mostly run by the communities although liquidity is provided by developers in many cases.

Advantages

Not controlled by a Central Authority/higher authority
Transactions happen On-chain and would be public forever
Respects the true meaning of Cryptocurrencies and therefore Blockchain
Underlying tokens are mostly found here
A token is first publicly introduced through a DEX

Disadvantages

Higher amount of risky tokens compared to CEX
On many chains, transactions usually take more time if the chain is highly used at that particular time
Transactions usually cost more compared to CEX
It is complicated compared, to do different chain transactions
Your funds are your responsibility

We have talked much about the advantages of DEX and disadvantages and the features of DEX with many other concepts but now the question is, Why does it matter?

I feel better when using a DEX compared to CEX because I am not only here to make money but to be also a part of a decentralized revolution of the world which is commanded by blockchain technology, the tech. of NFTs. These things are revolutionary and therefore to support these we need to use decentralized ways to provide a growth and good future for these. Using CEX makes it somewhere similar to Stocks (personal opinion) but again one thing is still I would like to share which the best reason for using a CEX is the deposition of a native currency like USD, INR, EURO or GBP.

It feels more secure to deposit the money in a CEX because we know if something happens then we could blame those higher authorities for the mistake in the end, right?

Some decentralized exchanges you can use are Pancakeswap, uni swap, apeswap, Leodex, etc.

PancakeSwap

Uniswap

ApeSwap

LEODEX

These are very popular platforms for trading in a decentralized way before there was not a feature like Futures trading in DEX but now if you go and see, you will find that as well in manyDEXs out there. There is a whole lot of room for development in this industry and that won't be done overnight. We all will keep making Defi space wonderful every passing day.

Before going I would like you to check this video which is about the King of Altcoins, "Ethereum". This would give you an idea about Centralized staking and decentralized staking in a lot better way and would be opening a lot more perspectives in your mind regarding the space if you were not aware of this. This won't take more than a minute of yours.

I found this on youtube a few days back and I am telling you that this man can give you knowledge that would mostly give you a SNES of astonishment. This video games me that and I thought it would be good if I share this fact about ETH with you all.

Thank you, everyone, I hope you must have enjoyed reading the post and also must have attained value from it. If you did it is great and if you did not then I am sorry, I would be doing better than this in my upcoming posts. Also, nothing here s financial advice but just my thoughts getting shared. I ain't responsible if you follow any of this, ok? Rest have a lot of fun with an incredible rest of your day. SANJAM

Posted Using LeoFinance ^Beta

What are Decentralized Exchanges and Why do they Matter?