What is a DEX and why you should know about it?

Decentralized exchanges (DEX) are leading the crypto-world into a state of less fake trading volumes, and price manipulation. Here is what you should know.

What is a DEX?

DEX stands for Decentralised Exchanges. The term describes cryptocurrency exchanges that do not have a central authority and run on code. Such exchanges usually exist in the form of decentralized applications (dApps).

What are the pros and cons of decentralized exchanges?

There are several benefits and drawbacks that come with this type of exchanges.

Benefits:

  • There is no central authority – Only you know your private keys
  • There is no KYC process
  • Since there is no need to transfer cryptocurrency to a DEX, risk for theft or hacking is reduced.

Drawbacks:

  • Oftentimes, Decentralised Exchanges have low trading volume and market liquidity
  • There is no possibility to reverse transactions
  • There is no customer service
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