what is decentralized exchange (DEX)

[smithtaylor]

1.  Control of Funds: In a decentralized exchange, control of their private keys and funds at all times. Unlike centralized exchanges, where you must deposit your assets, a DEX allows you to trade directly from your own wallet, reducing the risk of losing funds due to an exchange hack or failure.

2. Open and Transparent: Decentralized exchanges operate on blockchain technology, making all transactions transparent and traceable on the public ledger. This openness ensures that all trading activities can be verified by anyone, enhancing trust in the system.

3. Global Accessibility: A DEX can be accessed from anywhere in the world without the need for extensive verification processes. This makes it more inclusive, allowing people from regions with strict financial regulations or limited banking access to trade cryptocurrencies freely.

4. Lower Fees: Since there’s no intermediary involved, decentralized exchanges often have lower transaction fees compared to centralized exchanges. This can be particularly beneficial for traders who make frequent transactions, as it reduces overall trading costs.

5. Censorship Resistance: Because decentralized exchanges run on a network of distributed nodes, they are much harder to censor or shut down. This makes them an attractive option for users who want to trade without the risk of government interference or restrictions.

 

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