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MarkRoberts
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Bronze Bitcoiner
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Joined: Wed Jan 13, 2021 10:19 am

Disadvantages of DEXs

Wed May 26, 2021 11:12 am

As impressive as they can be, Decentralized exchanges have their fair share of drawbacks, and it is important to note these points before coming to a conclusion.
Transaction Speed

The processing speed of DEXs can be excruciatingly slow. This is because trading calls must be broadcasted to the network and verified by miners before being aggregated to the network. Moreover, this is why trades on DEXs are subject to suffering from price slippage, where transactions fail to execute due to variations in prices of the cryptocurrencies being swapped.
Liquidity

Centralized exchanges tend to be highly liquid because of their enormous capital. However, DEXs tend to have problems when it comes to liquidity. This is because their liquidity is heavily dependent on the number of users actively trading on the platform.

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