Nothing came up for

Blockchain 101: What's a DEX?

Lend us your voice!
Audio recordings make content accessible to more people
Record Article
Blockchain_101_DEX_Decentralized_Exchange

If you’ve been hanging around in the Crypto space for a while, you’ve heard the term DEX, and maybe you already know that it stands for Decentralized Exchange…but why are DEXes so interesting?

Consider this: There will always be multiple blockchain networks. There won’t be one big winner someday. Different networks have different utilities, different applications, different sets of investors and users, and different values that rise and fall. Just like we need to transact between other countries and fiat currencies, there will always be a need to move value between blockchain networks. These transactions take place on an exchange.

Today, most of these types of transactions take place on CENTRALIZED exchanges. Coinbase, Binance, and Crypto.com are a few examples of popular exchanges. A centralized exchange is a bit like a traditional bank: it’s a company offering a service. In exchange for that service, they set the policies and fees that you must accept in order to use the service.

Pros & Cons of CEXes (Centralized Exchanges)

There are some advantages to centralized exchanges; today, at least, they are more beginner-friendly, and since the users are, in fact, “customers,” they will generally provide some level of customer service. Currently, centralized exchanges are the only good way to trade crypto for fiat (i.e. US dollars).

There are also disadvantages; since they are centralized, they are more susceptible to hacking, interference, and failure. Transaction fees charged by centralized exchanges can stack up quickly, and the policies about how they conduct business may not be in the best interest of the user.

Bring on the DEXes

Ultimately it’s no surprise that in an emerging ecosystem based on the value of decentralization, the thinkers and builders would also dream up a way to decentralize exchanges. A “DEX,” as it’s called, allows peer-to-peer transactions between cryptocurrencies with no intermediary. The terms of execution are built into smart contracts – basically software built on the blockchain. The advantages of a DEX include securing your assets against hacking risks, cheaper fees, access to new investments that are not available on centralized exchanges, and greater anonymity.

There are also some notable disadvantages, especially in these early days. DEXes are not known to be beginner-friendly. The onus is really on the user to understand how a particular DEX works. If something goes awry due to user error or otherwise, no one on the customer service line will bail you out. Finally, DEXes do not address the need to transfer value out of crypto and into fiat money. In today’s world, that is still a critical link.

See the links below for a few resources relating to DEXs on Cardano, including a list of all (or many) Cardano DEXes and a blog post with an excellent comparative analysis of some of the most popular DEXes.

Related Links

  • CardanoExchanges (DEX)projects Article
  • What is the best DEX on Cardano? Article

Recibe más artículos como éste en tu email

Related Insights

DApps en Cardano - algo único

DApps en el Mundo Real

Introducción a las aplicaciones descentralizadas (DApps)

DeFi: Servicios financieros para el futuro

Aún no hay comentarios…

avatar
You can use Markdown

Join our pool!

Unmatched Support

We provide phone and email support for all of our delegates. We understand that many of our community members are not tech or crypto nerds. You expect the same level of service and support you get from Reggie down at the bank or Saiid, your nephew or friend at the office that won't stop talking about Bitcoin.

We host weekly meetups (currently online due to Covid).Visit our connect page for all the ways you can reach us. page for all the ways you can reach us.

Best in class servers

Our servers are run and managed by professionals whose only job is to manage and run servers 24/7 365/6 days a year.

We run our Cardano nodes on the same servers powering other services you've come to rely on everyday, like Google and Pokemon Go.

What this means for you is that our servers are always online and available to process transactions, earning you and the causes we support the optimal amount of $$$$. Visit our pool page for more technical details.

#4% for community development and investment

Of all the rewards that come in, we keep 4% annually. All 4% goes towards charities you pick, paying LIDO nation community members like yourself to write code and content for the site, and grants for local community educational projects.

See our financials page for full records of our spending, more details, and breakdowns.

An Amazing Community

When you delegate and join LIDO Nation, you get to participate in creating a space for people to interact, meet, learn, and teach each other. You get to be part of the engine that works to make every voice heard with equal importance.

LIDO Nation is an idea. Delegate, take it and lets make something great!

EP1: 'd' Parameter
0:00
/
~1:00
1x