Decentralized Exchange is the Only Reliable Solution Moving Forward
The one significant quality, which makes blockchain technology a revolutionary product is its decentralization. Decentralization refers to a system with no intermediary authority like a banking or financial body, and it distributes the right of authority from a single entity to multiple individuals. Still, many investors and traders have been investing in digital currency through centralized exchanges, which is not following the blockchain philosophy as CEX controls everything from funds to transactions. To get rid of this exchange intermediary, decentralized exchanges were developed which require no entity to process the transaction.
In simple words, the decentralized exchange allows its users to execute p2p transactions through a secure platform without the need of a governing authority. This is contrary to the working principle of centralized exchanges that take funds from one party, oversee the transaction, take out their service charges and then allow it to proceed to the other party. In a decentralized exchange, the distributed ledger acts as the intermediary party responsible for performing the transaction between two users and automatic codes run the operation for the execution of all transactions through the help of smart contracts. In DEX, different transactions have their specific extent of decentralization, which decides the execution or order fulfillment process. By relying on blockchain technology and its decentralization philosophy, users have more control over their cryptocurrency or digital assets and there is merely a chance of any failure keeping the trading secure and transparent.
The flawed and low transparency in the centralized exchanges and traditional financial system paved the way for the development of decentralized exchanges. The reasons or advantages that make DEX standout are briefly discussed below:
Verification Process or KYC- DEX provide the most secure, anonymous, and private platform to the users without the need to fill out Know Your Customer forms or undergo complex ID verification processes. There is no need to first sign up or make an account to access any of the decentralized exchanges.
No Risks Associated- as centralized exchanges are more or less like a conventional banking system so any hack on the exchange can make you bankrupt and all of your funds or digital assets would be gone. On the other hand, traders or users do not have to transfer their funds or cryptocurrency to the DEX for performing any transactions. As the user has full control over its fund reducing any risk of hacking, cyber theft, etc. DEX is also fraud-free as there are no fake price manipulations of the cryptocurrencies and there is no central authority that can create bogus trading volumes to gather users.
Universal Trading Options- DEX does not have any restrictions to users from a specific region and it also doesn’t block any token or cryptocurrency to be traded as in centralized exchanges which only list famous cryptocurrencies and limit small companies from listing on their platforms.
There is no doubt that DEX is the most reliable and the only lasting solution in this blockchain world but complete decentralization of platforms will take time, trust from the investors, and a more user-friendly system is needed. A few of the popular decentralized exchanges include Uniswap, Tokenlon, Venus, Sushiswap, BurgerSwap, Curve Finance, and 0x Protocol. ViCA has initially started its listing process on decentralized exchanges keeping in view its versatility and advantages and will also continue to expand its infrastructure to the centralized exchanges to reach a large pool of audience.
