WHAT ARE DECENTRALIZATION EXCHANGE'S, AND HOW DO DEXs WORK?
Decentralized exchanges (DEXs) are cryptocurrency exchanges that operate on a decentralized network, such as a blockchain. They allow users to buy and sell cryptocurrency in a way that is secure and transparent, as the transactions are recorded on a public ledger.
One of the key features of DEXs is that they do not rely on a central authority to hold or manage user funds. Instead, users are able to directly control their own assets and make transactions on the exchange using smart contracts. This means that DEXs are less vulnerable to attacks or malfeasance, as there is no central point of failure.
There are several different types of DEXs, but one common model is the "automated market maker" (AMM) DEX. These DEXs use algorithms to set the prices of assets and facilitate trades between buyers and sellers.
To use a DEX, a user typically needs to have a digital wallet that is compatible with the exchange. The user can then transfer their cryptocurrency to the wallet and use it to make trades on the DEX. Some DEXs may also require users to go through a KYC (know your customer) process to verify their identity.
Overall, DEXs offer an alternative to centralized exchanges and provide users with a way to trade cryptocurrency in a more secure and decentralized environment.
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