DEX Benefits

A decentralized exchange is an interface, a cryptocurrency exchange platform that simplifies and makes the transaction process intuitive for everyone.

What is the difference between decentralized exchanges and centralized exchanges?

DEXs (decentralized exchanges) and CEXs (centralized exchanges) are fundamentally different. DEX can be called an analogue of a traditional exchange. But what are the differences?

If you want to trade on a centralized exchange, then you need to register on it, enter your personal data.

DEX, as a rule, do not require registration and input of their information. All you need is to connect the wallet to the site, and then trading will take place directly between users without intermediaries.

In the case of centralization, the exchange companies control user accounts, as well as funds deposited on the exchange. On the DEX, the user is their own boss.

How does a decentralized exchange work?

Trading on the CEX is like an auction or order book where buyers and sellers place their requests. Buyers want to buy an asset at the lowest possible price, while sellers, on the contrary, are looking for benefits for themselves. The transaction will take place at the moment of agreement on the price.

On the DEX, all transactions occur automatically, using the automatic market maker model (AMM), each transaction occurs using a smart contract - a special code that fulfills trading conditions. Immeno he manages all transactions, and he is the guarantor of its security.

Benefits of a decentralized exchange

✔️ Anonymity

All that you show when trading on the DEX is the address of the transaction without any other data: registration, names, mail, phone, etc.

Since trading takes place virtually without intermediaries, between two user wallets, you do not need to go through any checks.

✔️ Funds control

DEX does not involve holding funds. Users are in control of their assets throughout the entire transfer process.

There are pros and cons to this: the key to your funds (seed phrase) is only in your hands. On the one hand, this is good, but you have a big responsibility. If you catch a virus or click on the wrong link on the internet, your wallet can be hacked. The risk of centralized exchanges lies in their vulnerabilities and control of funds by third parties.

In this case, no one regulates the exchange between users in any way.

✔️ Security

Because DEXs exist on a network of computers, they don't have a single point of entry, making it much more difficult for a hacker to attack.

It is also impossible for attackers to steal funds from the exchange, since they are simply not stored there.

In this case, a great responsibility falls on the security of smart contracts. A guarantee here can be an audit passed by a reputable company.

Nomiswap, for example, has been audited by CertiK:

https://www.certik.com/projects/nomiswap

✔️ Reliability

Since there is no single point of failure on the exchange, the chances of DEX crashes and downtime are greatly reduced. Updates are deployed to each node.

Even if individual nodes fail due to maintenance or attack, the remaining nodes can still manage the exchange network.

Happy trading on Nomiswap.io!