Unsafe CEX can destroy your portfolio’s health
Still so many retail investors trust their money to Centralized Exchanges
Centralized exchanges (CEX) like Robinhood, Coinbase and Binance are some of the most popular exchanges in the world for retail investors buying cryptocurrencies. Binance alone has a daily volumes of over $13 billion and Robinhood has 31 million members. These online trading platforms match buyers and sellers via an orderbook, functioning the same way as a brokerage account.
But what many retail investors fail to understand is that centralized exchanges have full control over their funds while they are interacting with their platform and there have been many examples of where investors have had their accounts frozen such as the GameStop fiasco on Robinhood, exchanges hacked or owners running off with the funds, like the recent Turkish exchange Thodex.
Decentralized exchanges (DEX), like Merrymen, PancakeSwap or Uniswap, are autonomous financial protocols powered by smart contracts that enable crypto traders to convert one digital asset for another with all transactions viewable on the blockchain. In this format, investors retain control over their funds while trading. This security and transparency is a key feature DEXs have over CEXs.
Know-Your-Customer (KYC) Policies
CEXs are subject to users having to comply with strict KYC policies. They require you to upload a photo of your face and a valid identity card to buy and sell crypto or make withdrawals. DEXs only require the user to connect their wallet to proceed, giving investors incredible privacy and preventing hackers stealing users data.
DEX flipping CEX
CoinGecko called Q3 of 2020 the “summer of decentralized finance (DeFi)” in its quarterly report and showed that the top-performing DEXs saw massive growth in terms of trading volume resulting in reducing the market share of CEXs. Volume increased on DEXs from $3.8bn in July to $30bn in September 2020.
This spike can be seen in the Block Crypto monthly chart of the DEX volume divided by CEX volume (as a percentage) and although the ratio has fallen back to 10% in July 2021, the trend will continue to rise as DEXs expand their offer and retail investors seeks out DeFi products and NFTs through smart contracts.
The Merrymen DEX
One of the reasons CEXs are so popular is the ease of access they give to so many investors. The Merrymen DEX wants to combine this fantastic user experience offered by modern exchanges such as the likes of Coinbase, Binance and traditional exchanges like Robinhood, with all the security and transparency that a decentralized exchange can offer.
Combining the best of both worlds, the Merrymen DEX, with its community focused tokenomics and easy to use interface will be a must use exchange for the savvy investor.
