Through the years, the cryptocurrency exchange industry has gone through major changes. Crypto traders have adopted various ways to ensure a seamless and hassle-free transaction when buying or selling tokens. Although traders are most familiar with centralized crypto exchanges, decentralized exchanges (DEX) are also popular.
Decentralized Exchange and How it Works
Because of the flaws discovered with the centralized exchanges, decentralized cryptocurrency exchange platforms were created. When a user wants to buy or sell crypto, they do it through an exchange platform. Aside from the centralized exchanges, users are seeing the benefits of transacting through decentralized exchanges like ADAX. Before you consider this option, it is important that you first understand how it works.
Centralized Exchange works where a third party is involved. It can be a bank, government institution, or trading platform. With DEX, this platform will allow users to purchase and sell crypto without the need for a 3rd-party mediator. Instead, the peer-to-peer transaction is done through a safe and secure online platform. This is what makes DEX different from the traditional ways of a centralized exchange.
Various Types of DEX
There are different types of decentralized exchanges that you should be familiar with. DEX is known to operate on a single blockchain. And even though there are various types, they all have one thing in common – they operate orders without having to keep the funds from the users. So here are the different DEX types that you should be familiar with:
- On-Chain. There are decentralized exchanges that follow a chain of processes. This ensures that all the stages are done in order. Although this process is slow and time-consuming, many prefer this because it is a safe option.
- Off-Chain. These are decentralized but are also centralized in some ways. Compared to the on-chain order books where everything is stored on the blockchain, the off-chain orders are being posted to other places. This offers less congestion, thus provides faster transactions.
- Automated Market Maker. This is currently the most popular DEX type. Unlike the first two DEXs, the Automated Market Maker (AMM) allows users to create a market without the need for a counterparty. There’s no need to directly transact with another exchange, person, or market-maker. But instead, the user will trade through smart contracts for a more seamless and hassle-free process.
ADAX – Trusted Crypto Auto Market Maker
Cryptocurrency traders these days are looking for the best Decentralized Exchange platforms in the Cardano Network. And right now, one of the most popular automated market makers in crypto trading is ADAX. The platform serves the Cardano network users. It lets you trade seamlessly with no restrictions with ER20 as its native token. ADAX was designed to have features in favor of the Cardano ecosystem for a smooth trading experience. Currently, ADAX is believed to be the best rival of the largest DEXs in this industry.
So, should you consider decentralized exchanges? There are plenty of reasons why fans and followers prefer DEX. They do not only prevent hacking risks, all tokens can also be traded here. And most importantly, users can keep their anonymity.