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MarkRoberts
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Bronze Bitcoiner
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Advantages of DEXs

Wed May 26, 2021 11:06 am

Decentralized exchanges are often praised for their enhanced privacy, tight security, and greater user control they offer to asset holders.
Security

Today, the biggest risk inherent to centralized exchanges is hacking. Malicious breaches of notable exchanges like Coincheck, Mt. Gox, and Bitfinex have affected the crypto sphere and significantly devastated the public’s trust in the space. The Coincheck hack is easily one of the largest hacks surmounting to over $500 million worth of cryptocurrencies, followed by Mt.Gox’s $472 million.

Unlike Centralized exchanges, DEXs are not vulnerable to this type of risk since users can freely trade on their platforms via cold or hot wallets without having to lose control of their private keys or recovery seeds. Simply put, users are responsible for maintaining the security of their accounts.
Privacy

Almost every centralized exchanges require sign-ups to comply with Know Your Customer verification processes. This forces asset holders to give up sensitive information to the exchange operator.

Interestingly, most DEXs do not implement this. Since they aren’t governed by any central authority, there’s no need to use KYC protocols.
Control

Users can exercise complete control over their funds in DEXs. Users will have complete custody of their funds and will be able to use them as they please. However, note that this doesn’t mean every DEX allows users to exercise complete freedom.


Source: https://mycryptoparadise.com/what-is-dex-how-does-it-work/

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