Decentralized Exchange - A Trending Cryptocurrency Trading Service
What is a decentralized exchange?
Exchanges which happens without the involvement of any intermediaries are called decentralized exchanges . Website which performs such kind of exchanges are known as decentralized exchange websites.
Wanna more clear explanation ?
Most of the existing crypto exchanges are completely centralized, that is you can't trade your digital assets without the involvement of the admin. Where the admin controls all your digital assets and funds. After verifying the trading requirements and all your funds, admin will enable trading between you and the corresponding buyer/seller.
This entire process will take too much time to trade your assets
Dangers in Centralized Exchanges:
1. The danger zone of a centralized exchange is you should share your "Private keys to the exchange , and they will store the key in central server"
2. No guarantee for your funds. since you deposit it to the admin wallet.
3. Instant trading is not possible.
4. Server down time
How DEX ( Decentralized Exchange ) or better than CEX (Centralized Exchange) ?
A decentralized exchange is an exchange platform which does not depend on any third party services to control the customer's digital funds. Here the trade occurs directly between the user to user and there is no work for admin to control the funds. Traders don't need to deposit their funds into admin account while initiating the transactions. Instead, they could directly trade from their own cold wallet or hot wallet. Decentralized exchange website will not store private keys on a central cloud server. So, sure this will be very hard for hackers to hack.
Benefits of Decentralized Exchanges over Centralized Exchanges
1. It creates a trust for your exchange business
2. It requires zero KYC, but provide 100% privacy
3. No need to transact your funds to a third party wallet before initiating a bitcoin or cryptocurrency transaction
4. Here User control funds
5. No Hacks and no server downtime
6. The hosting is distributed through nodes so there will be no server downtime
7. Here your coins are yours
Source : The Importance of Decentralized Exchange Websites