Building up of a Decentralized Exchange (DEX)
In this article, we will be focusing over a more advanced form of digital exchange that is decentralized in nature commonly known as decentralized digital exchange ( DEX) it’s making and applicable features.
The major hype for digital exchanges begins with the inception of the world’s first digital currency Bitcoin after that many digital currencies became famous worldwide. However, with this hype, the hackers started finding new ways to penetrate in an application.
For this, they would try to find flaws in the software, and if not found in that part they would proceed to hardware, and if not in that part too, they would look for cracking the server code, thereby funds stored over Central server are not safe and are vulnerable to cyber-attacks, so what can be a solution? Well, the solution for this is “Decentralised Exchanges” that is discussed in this article.
Enhanced security
Decentralized exchanges are nowhere aiming to merely solve the purpose of storing users fund over the exchange account but it also seeks to bridge the gap between the buyer and the seller this means that access to the account is held with the users and thereby the security is enhanced
Identification
Since decentralized exchanges work over the blockchain technology therefore only two things are applicable which are recording data and interpreting it. Thereby, there is no provision to modify or delete any information stored over this kind of exchanges. Some of the examples of blockchain frameworks that support this form of decentralized exchanges are bitshares, 0x protocol, and ethereum
Hidden Identity
We cannot forget the bad phase of digital currencies in the year 2017 and 2018 in which superpowers like the USA and Australia taxed the digital currencies, and China banned the usage of digital currencies. However, with the introduction of decentralized exchanges, anyone can trade digital currencies without even disclosing their Identity. Thus, in the case of decentralized exchanges, there is no need for users to complete any KYC or AML. This platform keeps the Identity of the users confidential.
Ease of scalability
Decentralized exchanges give its users an exclusive opportunity to set their price and let the buyers find them over the platform easily.
Easy to add tokens and digital coins
Over the decentralized exchanges, it is easy to add a new token or a digital coin. For example, take the case of a user who decides to launch a decentralized exchange over ethereum in this case all the ERC tokens will get enlisted over the platform in a short period.
Easy to access digital coins
If a user desires to access a digital coin of his choice then, in that case, decentralized exchanges provides various options like
- Importing a binary file
- Import or generate a private key
- Metamask integration by the use of web3. js
Blockchain Frameworks
There are several blockchain frameworks among them the most common are ethereum, 0x protocol, and bitshare
Bitshares: In this kind of framework various nodes or we can say participating members can collectively create a closed and interconnected ecosystem where every token, called pegged token is having a value equivalent to US dollar or a Bitcoin
Ethereum: This is another essential blockchain framework whose significance is not limited to a digital coin instead it depends upon the functionality of smart contracts which allows users to manage the number of intermediaries and thereby automate the entire process
0x protocol: This framework is an open source protocol which facilitates P2P exchange of assets over an Ethereum Blockchain
Summary
Thus, in the current scenario when the majority of people are talking about user privacy, come up in the picture which promises better trading of digital currencies in a convenient way
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