Are Decentralized Exchanges (DEX) better?
Simply put, DEX is a bunch of cryptocurrency wallets trading with each other, instead of financial middlemen (centralized exchanges) facilitating the transactions. The biggest impact it makes is in the ownership of the assets, which lies solely with the users — they are in charge of their private keys, their holdings, and all the related data.
So, are DEX better than conventional exchanges? Well, let’s look at the facts.
- Say “NO” to KYC — DEX removes the need for KYC complications, meaning no sharing of your documents with any third party. Such a relief right!
- No “extra” commission — Since all the transactions are directly done “on-chain”, without any middlemen to facilitate them, it removes the exchange commission charged on every trade.
- No one to blame — You can’t have all the positives right! The same goes with DEX. With you being the custodian of your holdings, it’s your responsibility to keep your assets safe.
- No government control whatsoever — Since the DEX doesn’t own any data, the governments can’t really ask any developer/DEX to give them access to users' data.
Well then, is it being adopted? Uniswap, one of the largest DEX in the world, clocked around transactions worth $1B per day by end of 2021.
So what do you think? Is DEX better than centralized exchanges? Let me know in the comments!
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