Decentralized Crypto Exchange Information / Guides / Pricing / Comparisons

Decentralized exchanges are online platforms where users can trade cryptocurrency directly with other users. This means that the transactions happen using a peer-to-peer mechanism without having any central intermediary.

An average decentralized exchange has more than 1500 different types of coins which are on offer. This is much more as compared to an average centralized exchange where only about 50 different types of coins may be offered. Hence, if investors want to buy a cryptocurrency that has not become extremely popular, they can only buy it on these decentralized exchanges.

There are no physical offices of a decentralized exchange. These exchanges only exist in the virtual world. Hence, they are often not registered with any government. In fact, most of these exchanges do not operate from a single location. Instead, their computer networks are spread out over many countries.

Decentralized exchanges are online platforms that can operate at very low costs. This is the reason that the transaction fees on these exchanges are quite low. These exchanges only have to compensate other parties who provide liquidity which is why they can afford to operate on transaction fees which are much lower as compared to centralized exchanges.

decentralized exchanges are not regulated. Hence, they do not need to abide by the rules and follow KYC norms. Transactions in most decentralized exchanges can be done in a completely anonymous way. The only thing required to transact in such exchanges is a digital wallet with funds in it.

The control and possession of coins remain with the user. Unlike, centralized exchanges, the coins are not deposited with the exchange but instead remain with the users themselves. This eliminates the chance of confiscation by the exchange or at the hands of government authorities.

Decentralized exchanges only accept cryptocurrency for payments. On the other hand, centralized exchanges accept fiat currencies. Hence, if an investor uses decentralized exchanges, they cannot use wire transfers and such other modes of payment that are commonly used.

Since decentralized exchanges are operated anonymously, there is always a chance of price manipulation. In the past, prices on decentralized exchanges were found to be higher as compared to centralized exchanges.

Since coins are not managed by the exchange but by the investors directly, there is always a chance of an attack by hackers. Hackers often try to lure investors into revealing their private keys so that their money can be stolen. Since the exchange is not in charge of security, investors have to be extra vigilant in order to avoid fraud.

Decentralized exchanges offer limited functionalities as compared to centralized exchanges. There are no stop-loss or limit orders available in most of these exchanges. The user interfaces they offer are also quite complex. Most novice investors have reported that they find the interfaces to be complex and overwhelming as compared to centralized exchanges where the interfaces are intuitive and easy to use.