DEX is an innovative technology that allows you to trade on the exchange without intermediaries. It is an autonomous smart contract that is built on top of the blockchain. It is code that always does what it is programmed to do. All this information sounds very attractive and modern. And in this article, we will look at DEX from all angles.
The most convenient tool is DEX aggregator Odos, which helps to make the most profitable offers. Almost all users who trade on decentralized exchanges use this tool, because it helps to conduct their business more professionally.
How DEX work
To explain in simple words, then one cryptocurrency is deducted from our wallet and another one is credited. But inside the DEX, it’s more complicated. For example, we want to exchange USDT coins for 1INCH. The place where we change the coin can be represented by two containers where USDT and 1INCH are stored. The USDT that we want to exchange does not immediately enter the exchange, first it enters the vault. But from this process, a commission is taken, which ends up in the DEX.
Decentralized exchanges are a platform for the exchange of digital assets that operate without central control. As mentioned above, this is an innovative program. This is brought about by certain facts, which we have described below:
- All decisions in such exchanges are made decentralized, that is, based on the algorithm that is embedded in the protocol.
- The exchange does not store personal data and does not store user funds.
- No need to register and many checks.
To start using DEX, simply connect your wallet to the platform. There is a high level of security here, you do not share your personal data with anyone, with the help of which your wallet can be hacked. The fact that the exchanges do not have a governing body is an advantage, because no one has the ability to block you. You can withdraw any token to the DEX at any time.
But the shortcomings also found these exchanges. For example, each user is personally responsible for all their assets, so you need to be responsible in choosing a service for storage. If access to the server is lost, the user loses their assets beyond recovery. Even though decentralized exchanges are at a more advanced level, there is limited functionality. But this does not greatly affect the results. Additional programs and servers can help with additional functions.