Every time an exchange is hacked, it seems a DEX springs up. Although these decentralized exchanges have advantages, it can be difficult to find the best one. Here are our top 10 recommendations.Weighing the Pros and Cons of DEXes
DEXes seek to execute the same scale as centralized alternatives without a central authority — or engine — to execute trades. Like many attempted blockchain solutions, this task is also incredibly challenging. By trading away speed, pair variety, and sleek interfaces, DEXes offer much more in the way of security and anonymity.
For those looking into cryptocurrency, especially from the traditional finance sector, trading well-established cryptocurrencies like Bitcoin or Ether still appears precarious. With only a few exceptions, the threat of hacks is a major deterrent.
Malicious agents have managed to tap into various centralized exchanges and extract critical user information to make off with funds. Additionally, losses have often surpassed multi-million dollar figures. More importantly, this lack of security has tarnished the image of the crypto space as a potential competitor to conventional exchanges all over the world.
Various projects have since sprung up to meet this demand by applying different tenets of decentralization. In the following list, we’ll outline the nuances between each of these differences.
A few common threads will reappear, including whether DEXes execute trades on-chain or off-chain, how orders are matched, and how these platforms approach “know-your-customer” regulations. Such regulations have also been a major sticking point for many in the crypto community.
One of the more interesting stories of 2019 was the fall of EtherDelta, formerly the world’s top DEX. Much of its popularity came from the fact that the exchange did not require any KYC policies on the platform. Anyone in any part of the world could simply log in and begin trading immediately.