The importance of Decentralized Exchanges
An overview of Decentralized Exchanges and why they are important in the crypto space
What is a Decentralized Exchange (DEX)?
A decentralized exchange (DEX) is a cryptocurrency exchange that operates in a decentralized manner, without the need for a centralized authority. Decentralized exchanges are operated by code and allow peer-to-peer trading of cryptocurrencies. They are generally non-custodial, meaning you hold the private keys to your wallets. Your assets remain your responsibility. Centralized exchanges, on the other hand, are operated by a centralized authority and are custodial, meaning the platform holds the keys to your wallets. Your assets are controlled by the exchange.
Why have Decentralized Exchanges not yet been widely adopted?
Both centralized and decentralized exchanges come with their pros and cons. Centralized exchanges come with convenience but at the cost of giving up control of your assets. They also offer low fees, more liquidity, less technical knowledge to operate and access to more trading pairs. The only problem is that all centralized exchanges are custodial, which ends up being the biggest downfall. Your assets are at risk if you store them on centralized exchanges, we covered some of the largest crypto exchange hacks previously.
You have to remember, your keys your coins. If you do not hold the private keys to your assets, are they really yours? Decentralized exchanges are a good alternative to their centralized counterparts, provided you have the technical know-how and are confident enough to store and control your own crypto assets. Up until now, the majority of top decentralized exchanges only allow for the exchange of assets residing on single chains, for example, you can only trade Ether and Ethereum based tokens on IDEX. What if you want to trade Bitcoin or EOS? Current decentralized exchanges are isolated and operate only on their own chains. This is where cross-chain decentralized exchanges come in.
What is a cross-chain decentralized exchange?
Cross-chain means communication can take place between otherwise isolated chains. This allows for the transfer of value and data across different blockchains, the ideal use case here being a cross-chain decentralized exchange. This would allow users to trade assets across different chains in a decentralized manner. How is this possible you may ask? Using wrapped assets allows users to trade a representation of an asset residing on a different blockchain, all on one single, very fast chain. Once the trade is complete, the native asset can be redeemed, burning the wrapped token. This is how WRDEX operates.
The Wanchain RiveX decentralized exchange allows users to trade Bitcoin, Ethereum, EOS and many ERC-20 and WRC-20 tokens. More and more assets will be listed on WRDEX allowing for a wider variety of trading pairs once Wanchain has implemented more blockchains using their cross-chain solution. WRDEX is completely non-custodial which means you remain in control of your assets at all times. Since WRDEX is built on the Wanchain blockchain which has a transaction speed of 1000+, transactions are super fast. WRDEX is also accessible via a web portal, RX desktop and mobile wallets, as well as Wanchain Light Wallet. This allows you to trade your assets from within your wallet, rather than having to send them anywhere. WRDEX will also have a simple, easy to understand user interface as well as extensive documentation explaining how to use the exchange.
WRDEX Web portal
WRDEX RX Wallet portal
WRDEX Wanchain Light Wallet portal