So, you’ve finally made up your mind to buy cryptocurrency! Even though there is nothing wrong with this decision, you need to use an exchange or cloud mining Services. But with hundreds of trading platforms popping up to serve the growing crypto users, you may end up falling prey to scam issues, including lost funds and hacks.
The good news is you can protect yourself from such issues by taking advantage of a DEX trade exchange. So, what is a DEX, and why should you choose it over a centralized exchange? Keep reading to find out more!
What is a Decentralized Crypto Exchange?
Before we jump into the pros of a decentralized crypto exchange, it pays off to determine what you’re dealing with in the first place. Unlike a centralized exchange that operates similarly to a bank, a DEX never takes charge of your funds. In most cases, the critical operations take place on a blockchain.
Therefore, users have control over their assets while at the same time benefitting from safer and more transparent trading. Remember, decentralized exchanges count on smart contracts to perform market transactions.
Reasons to Use a Decentralized Crypto Exchange
There is more to using a decentralized exchange Dex than you may be thinking. Below are a few reasons to consider taking this approach when investing in crypto.
- Guaranteed Security
For a moment, think of that time when someone hacks a centralized exchange and steals crypto, yours included. Merely thinking about it is reason enough to send chills down your spine. That’s what happens to most centralized exchanges as they hold a large amount of funds, making them more susceptible to hacking.
Decentralized exchanges excel in this regard as they help mitigate hacking risk. And this is easy to see why since users no longer have to transfer their assets to third parties. For this reason, you will not panic over hacking in a company and the theft of crypto under your nose.
- Trade Different Tokens
If you prefer trading new and obscure crypto that was initially difficult to get hold of, then the DEX exchange is what you need. In most cases, centralized exchanges only support popular cryptocurrencies confining users to what they offer. That makes it nearly impossible to trade less popular or smaller tokens. Rather than turning a blind eye as this happens, consider making the switch to a DEX or a Decentralized Application (DApp) and trade different tokens.
Trading on centralized exchanges can feel like a mammoth task since you contend with mandatory KYC and anti-money laundering checks. However, not every crypto investor is into the prospect of sharing this information with third-party entities. After all, you never know what will happen to your data.
Decentralized exchanges don’t require you to fill out know-your-customer (KYC) forms, thus giving you peace of mind. All you need is a wallet address, after which you can start trading. That’s safer than having to share your private information with companies you don’t trust.