DEX (Decentralized Exchange) is a type of cryptocurrency exchange that operates without the need for any central authority or intermediary. A DEX allows users to trade digital assets directly with one another in a secure and trustless manner, using blockchain technology.
Unlike traditional exchanges, where customers must entrust their money to the centralized platform’s bank account or wallet – which can be vulnerable to hacks and other malicious activity – DEXs are more secure as they do not store customer funds themselves; rather, all transactions between buyers and sellers occur on-chain directly from user wallets. This makes it virtually impossible for hackers to gain access to users’ funds since no centralized database exists storing them. Additionally, due to its decentralized nature, a DEX does not require identity verification when trading cryptocurrencies making it an attractive alternative for those who wish remain anonymous while exchanging tokens.
DEXs have become increasingly popular among traders looking for greater security over their investments as well as faster transaction times than what traditional exchanges offer. In addition, most Decentralized Exchanges allow both limit orders (where buyers/sellers place instructions at pre-determined prices) and market orders (where trades are filled immediately). As such this offers investors more flexibility when trading cryptocurrencies compared with Centralized Exchanges which typically only support limit order functionality.
Finally given that these platforms run independently from third parties there is usually less risk of technical issues arising during execution unlike many Centralised crypto exchanges – meaning trades should go through quickly provided sufficient liquidity exists within the marketplace
