Value: CEX And DEX
Intermediate transactions are platforms that provide crypto services to users while managing user assets. Some popular examples of CEXs are: Binance, Huobi, Kucoin, and Gemini. Localized trading on the other hand is an exchange that allows users to access crypto services while users retain full control of their assets.
This means that DEX users have their own private keys. Popular examples of DEX include Pancakeswap, Uniswap, Sushiswap, and 1inch exchange.
The debate between CEX and DEX has been going on for a long time now. While many crypto users firmly believe that real estate transactions are better than medium exchanges, others cling to the opposite view.
Centralized Exchanges:
Intermediate commerce has many positive aspects that are not in place. At the same time, it has its drawbacks. What are the pros and cons of CEX?
Benefits of Centralized Exchanges:
1.Fiat-Crypto On-ramp
It is very easy to convert fiat money into crypto and crypto for fiat on medium exchanges. Many cexs allow users to purchase crypto using a debit or credit card. This makes it easier for newcomers especially to own crypto assets. With just a few clicks and a short click, a cryptocurrency can be purchased on a medium-term exchange.
2. Trading volume
Intermediate trading does not use cash pools. Instead, they use book order to make buying and selling crypto seamless. Users wishing to purchase property purchase orders. These purchase orders are then matched to matching sales orders from users who want to sell their goods. When the exchange has more users, the cost increases and the spread decreases.
Therefore, crypto users are often drawn to trading at higher volumes. Currently, Binance exchange has a large trading volume with millions of traders worldwide using the exchange. Every day, the exchange records more than $ 30 billion in trading volume.
3. Many Features
Many CEXs have many useful features. Unlike DEX their use is often limited to rotation, integration and cultivation, CEX can be used for much more.
For example, the Kucoin exchange has a feature that allows traders to trade with a trading bot. The Bingbon exchange is famous for its copywriting business. Users are allowed to easily install and make a profit or loss by automatically copying the more experienced trader.
Margin trading and lending are also popular in medium-sized trading. Many new features such as NFT markets can be easily added to CEX.
4. Easy to use
Medium trading is easier to use compared to spatial trading. New crypto users will definitely get lost through shared transactions. However, in CEX, the user interface is generally easier to navigate. Words used in CEX such as “buy” and “sell” are also easy to understand. Additionally, some CEX forums have a lite version and guidelines to help noobs succeed.
Cons of Centralized Exchanges:
Intermediate trade has its disadvantages too. Some of these are highlighted below.
- Not your keys, not your Crypto
This popular term is used in the crypto world to remind users of intermediate transactions that anything can happen to their property at any time. CEX users do not have private keys. Thus, their goods are kept in one place. Owners of intermediate exchanges may decide to close at any time and pay users’ fees. This has happened with several trades in the past.
2. Lack of Confidentiality
Anyone using CEX should discard the privacy level. Real names, email addresses, and identity cards, even a document showing the user’s address are usually sent in exchange for verification. While this was done to curb fraudulent activities and financial crime, it also prevented many qualified people from benefiting from the crypto ecosystem.
3. Criminals
Since the advent of CEX, there have been numerous hacks from cybercriminals in various trades. Kucoin, Hotbit, Huobi, and even Binance have been attacked in the past. Although, these attacks have sometimes been quickly recognized and stopped. At times, the invaders have succeeded and lost millions of dollars.
Good intermediate trading offers the following features:
Security: Security should always come first. A good exchange will greatly emphasize the security of their users’ accounts, personal information and the system in general. Most of the goods should be stored offline in the cold storage system. Also be aware of additional security features such as two-factor authentication, withdrawal guarantees etc.
Liquidity: CEX consistently offers better money than DEX at this time.
Reputation: Well-established, long-term trading is the safest option.
Fiat Currency: Check if fiat currency is supported. If so, you will be able to trade your traditional currency with crypto.
Interface: The site should be easy to navigate, even for beginners crypto.
Uptime: Avoid alternating periods of rest.
Verification: Although some users find authentication and KYC processes difficult, you should look at it differently. They are made with the best intentions of preventing money laundering and all other forms of fraud.
Decentralized Exchanges:
Location exchanges are considered the most secure trade for crypto users. Like the CEX, they have their pros and cons. You start by choosing whether to try to buy or sell a token at the top of the screen. Next, select the token and the amount you want to trade. Then, press the Find Trades button.
DEX facilitates peer trading by relying on automated smart contracts to conduct trading without a mediator. However, not all DEX use the same infrastructure. While some maintain standard order book models, others use emerging liquidity protocols.
Decentralized exchange (DEX) is a peer-to-peer (P2P) marketplace that connects cryptocurrency buyers and traders. In contrast to intermediate trading (CEX), default domains do not have retention, which means that the user always controls his or her private keys when performing work on the DEX platform.
In the absence of a central authority, DEX uses smart contracts that execute themselves under fixed conditions and record each blockchain transaction. This unreliable, secure transaction represents the fastest segment of the digital commodity market, and opens up opportunities for new financial products.
Benefits of Decentralized Exchanges:
Other factors that make international trade different are privacy and anonymity, as well as security.
1.Privacy and anonymity
Limited transactions do not require users to submit personal information as do CEXs. All you have to do is connect your wallet to sign the blockchain transaction. Therefore, anyone from anywhere can have access to crypto currents using a decentralized exchange.
2. Security
Domain transactions do not have a website that stores users’ private keys. User has his or her private keys. Thus, hackers cannot attack DEXs to gain access to the central website. Unless the user relinquishes his or her secret keys, or engages in malicious agreements his or her money will remain secure and secure.
Cons Of Decentralized Exchanges:
Two major concerns regarding trading are divided into trading efficiency and efficiency of DEX.
- Limited Trading Performance
Many DEXs do not have exciting features such as jeans or futures trading. Limited orders help sellers to buy or sell goods at a future price, but this feature is not in place of exchange. This makes users more attached to CEX.
2. Efficiency
Many blockchain protocols face strain issues. This makes it difficult for DEX to easily accept multiple users at once. The issue of robustness and efficiency does not exist in CEX. This is because CEXs operate both on-chain and off-chain, unlike DEXs that operate fully on the chain.
Closing Thoughts:
DEX gives users complete control over their assets and privacy. With CEX, the user does not fully control his assets and does not have a core component of blockchain technology which is the expansion of spaces.
Beginners can find CEXs easy to navigate through. On the other hand, experienced traders who know their way into the crypto world and who would like to take control of their assets will love the DEX.
Users can also combine both. CEXs can be used when one wants to trade or buy and sell. DEX may be used for long-term storage.
Transaction fees at DEX exchanges is insanely high (5–35%):
DEX in BSC is almost free to use, difference? Gas ETH gas fee. Currently the transaction costs on the Ethereum network are so high that buying something with a DEX like Uniswap can cost $ 100. However, it is not Uniswaps’ fault at all — it is due to Ethereum congestion.
There are alternatives to different chains, such as the Pancake swap, and CEXs that will continue to cost less. Unless you have a specific destination, you’re just moving the car and wasting gas.
With 3rd gen blockchains DOT and Cardano (among others) also options soon, this should bring us alternatives, but it could be months ahead.
