Why do people use DEX instead of CEX?
Asked 2 years ago
Hi, I understand that decentralized exchanges are the new big thing and that they allow you to manage your finances without a middleman. But isn't it riskier to do things this way? How do you know that the protocol is intact and your finances are safe?
Tuesday, May 24, 2022
A DEX is free from government regulations, financial requirements, and monitoring. Traders face each other on a peer-to-peer basis, and there is no intermediary to confirm transactions. The absence of intermediaries lowers transaction costs and increases the speed of executing trades. Besides, users have total access to their private keys and, thus, they self-custody their assets. This reduces the chances of hacking.
Anonymity is another reason why people prefer DEXs to CEXs. DEXs do not have log in procedures, no KYC, and no requests for personal documents. Again, DEXs offer a broader basket of tokens that you rarely find in CEXs.
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