Are decentralized crypto exchanges safe?

Asked 2 years ago

Good morning. Is decentralized crypto exchanges safe or should I rather invest in stocks? I'm concerned about how vulnerable it is based on liquidity. What are the risks I should be aware of?

Jeramiah Evans

Wednesday, February 16, 2022

Compared to their centralized counterparts, decentralized exchanges do a good job of being trustless, handling security, privacy, and asset sovereignty. Users' funds are not stored on the DEX; to use a DEX, they connect to the platform via a non-custodial wallet like Metamask. This removes the risks of losing funds due to hackers. However, this also presents new risks. Ownership and management of funds rest on the shoulders of the users; newbies might get careless, connect their wallets to a phishing site and still lose their funds. Unlike centralized exchanges, DEXs have no method for recovering lost or stolen funds.

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