What is DEX Platforms?
DEX refers to Decentralized Exchange. DEX takes a position in eliminating oppressive restrictions imposed by authority and additional mediation in transactional procedures. The seller and buyer freely transact through P2P.
Everyday financial transactions bear transactional brokerage processes. One must verify identity when transactions happen between a person, a bank, or a broker. Occasionally the authority may demand rigorous transactional standards. It creates extra costly fees. Another issue is the transaction processing speed, which is often slow despite the complicated procedures and the commission incurrence.
To solve such an issue and lower the cryptocurrency transaction difficulty, the decentralized exchange, DEX, has come to the surface. DEX regulates the supply and demand of cryptocurrency within the exchange through the SMART CONTRACT adaptation. Also, as each transaction skips either authentication or screening of personal information, the time consumed for the transaction and costs, such as commission fees, are reduced.
The Features of DEX Platforms
DEX, the Decentralized Exchange, has a distinct feature that sharply differs from the existing centralized exchange. There are two significant features that we will touch upon below.
1. Smart Contract
The decentralized exchange differs from traditional financial agencies in terms of an organizational system. Financial institutions like banks need the labor force to run them, firms to manage them, and brokers to scrape up consumers. However, in the decentralized exchange, such processes or mediators are non-to-exist. Because instead of humans, the program conducts transactional brokerage, which is the be-all-and-end-all operation of monetary facilities.
This program is called SMART CONTRACT. SMART CONTRACT is programmed to seal the transaction when all the traders meet the terms and conditions in the trade agreement. This application enables prompt and accurate transactions regardless of time and space while processing complex documental reviews or authentication procedures.
2. Personal Information Security
DEX is excellent in anti-hacking by keeping transactional information within the blockchain. Since CEX records its transactional content in the central database, all clients’ data stays vulnerable if a hacker tries to attack the database to steal. At this point, the stolen information also contains hypersensitive information, such as ID cards used in transaction authentication.
On the contrary, There is no central database in DEX. The information is dispersed and stored in a blockchain, and once it is registered, it is hard to counterfeit. Therefore, the client’s personal information stays protected.
The Fortes of DEX Platforms
The fortes of DEX are that it is decentralized. It simultaneously acts as a merit and creates a difference from the centralized exchange because the decentralized transaction method is a way to solve the problem of the existing financial system. DEX strengths boil down to three.
1. Non-KYC Confirmation
DEX does not require ‘KYC,’ the authentication procedure of the client’s identity. CEX demands KYC verification by submitting the real-name financial transaction system to secure transactional stability.
However, while hacked information stored in the database through KYC results in leaked personal information, DEX does without KYC confirmation. With cryptocurrency wallet, anybody can do transactions.
2. Low Commission Fee
Compared to CEX, the commission charged by DEX is low. CEX grabs a high commission rate as a platform usage fee, mounting up to somewhere between 0.02%~0.05% of the total transaction amount. Contrary to this, DEX does not mediate in transactions but merely demands coin transmission cost. Hence, the sensational popularity.
3. Tradable Unlisted-Tokens
Even the tokens that are not listed in the central exchange trade in DEX. Since the central exchange exclusively lists mostly high-profile cryptocurrencies, on many occasions, tokens with relatively low expected value are impossible to trade. However, in DEX, the token oriented towards decentralization and not listed due to low profile are tradable.
How to Use DEX Platforms
The way to use DEX is straightforward. Once the virtual wallet is created, you may proceed following the exchange’s guidance. Here are the specific methods based on etherium.
1. Creat Wallet
Create your own virtual cryptocurrency wallet.
Freely generate a wallet by choosing from a hot or cold wallet and link this wallet to a meta mask. At this point, you are given seed phrases that must be kept away from being hacked or lost.
2. Purchase and Wire
Purchase etherium at CEXs such as Bithumb and wire it through your virtual wallet.
3. Check the information
Check the information on the cryptocurrency you intend to purchase by hooking up with the place which bears the terms and conditions that agree with you or stores the cryptocurrency you are after.
4. Connect Wallet
Send the ethereum through the wallet and fill in your wallet address for receipt.
5. Check Cryptocurrency deposited
Check whether the cryptocurrency deposited in your wallet through DEX complies with the correct traded amount and information.