Decentralized Exchanges Vs Centralized Exchanges

[GreatArkansas]

Recently, we heard a lot of issues about centralized exchange especially the China crackdown on some centralized exchanges like they have this law for people of China about restricted to have activities on most the centralized exchanges.
And here's the decentralized exchanges starting to make some noise, and I always heard dydx exchange, serum, uniswap, etc.

So, as traders. For you, what is/are the advantage is disadvantages of using decentralized exchange over centralized exchange these days?

[electronicash]

users are sometimes untrusting to deposit coins or tokens but they can avoid doing this with dex since assets stays in the wallet even when trading. were all familiar with uniswap which kyc is not needed as well which is what dex users want for privacy.

even dex today are prohibiting users from China. they prompt an update changes to their TOS about citizens from China. it doesnt sound dex when they do this.

[SquirrelJulietGarden]

Recently, we heard a lot of issues about centralized exchange especially the China crackdown on some centralized exchanges like they have this law for people of China about restricted to have activities on most the centralized exchanges.

China prepared and implemented regulations to help their e-yuan gets as best launch as possible. However, the regulations can not prevent Chinese to get more exposure to cryptocurrency and use it in their lives.

When their e-yuan gets enough success, I think they will allow crypto exchanges to operate in China mainland again.

And here's the decentralized exchanges starting to make some noise, and I always heard dydx exchange, serum, uniswap, etc.

People will try to find the more convenient options and when centralized exchanges are in troubles, decentralized exchanges will be their choice.

Do you think it is a bit funny because decentralized exchanges are available since 2020 but now they are seeding and making noise again? Many coins of those decentralized exchanges already grow too much since 2020.

[Findingnemo]

Well, for me decentralized is still not becomes an alternative to centralized exchanges because we have to pay more there as trading and transaction fee also cross chain transactions are not possible and also fiat. But people choose to trade on DEX when they are not ready to comply KYC.

[SquirrelJulietGarden]

Well, for me decentralized is still not becomes an alternative to centralized exchanges because we have to pay more there as trading and transaction fee also cross chain transactions are not possible and also fiat. But people choose to trade on DEX when they are not ready to comply KYC.

Not all people care of KYC and their privacy. They only want to buy and sell coins. KYC is not their priority. DEX with swap feature, cross chain transactions give them multiple pairs to switch their portfolios. I think if the transaction fee for swap is not high, on chain like Solana or Near and if these ecosystems become bigger and integrated more on decentralized exchanges, people will like DEX more than CEX.

[Findingnemo]

Well, for me decentralized is still not becomes an alternative to centralized exchanges because we have to pay more there as trading and transaction fee also cross chain transactions are not possible and also fiat. But people choose to trade on DEX when they are not ready to comply KYC.

Not all people care of KYC and their privacy. They only want to buy and sell coins. KYC is not their priority. DEX with swap feature, cross chain transactions give them multiple pairs to switch their portfolios. I think if the transaction fee for swap is not high, on chain like Solana or Near and if these ecosystems become bigger and integrated more on decentralized exchanges, people will like DEX more than CEX.

Hopefully in future the decentralized exchanges will progress and become more convenient for trading regularly but for now I am avoiding due to low trading volume and high fee on most of the time then fiat conversion is lacking there.

[o_e_l_e_o]

So, as traders. For you, what is/are the advantage is disadvantages of using decentralized exchange over centralized exchange these days?

Privacy - I don't have to send my KYC details to some anonymous stranger who will send it to a bunch of third parties for verification from where it will likely be sold or stolen and end up on the black market, and I don't have a centralized exchange analyzing all my deposits and withdrawals and sharing all that information with blockchain analysis companies, governments, and other third parties.
Security - I don't have give up control of my coins to a centralized third party who could be hacked or could choose to scam me, freeze my account, or seize my coins at any time.
Censorship resistant - I can trade with who I want when I want without requiring a third party to give me permission first.

Do you think it is a bit funny because decentralized exchanges are available since 2020 but now they are seeding and making noise again?

The first version of Bisq was released in 2014 - https://github.com/bisq-network/bisq/releases/tag/v0.1.0. Bisq has been around longer than most centralized exchanges.

[Oshosondy]

When their e-yuan gets enough success, I think they will allow crypto exchanges to operate in China mainland again.

You ain't wrong at all because it is yes that Chinese government is looking for ways to make sure its citizens use digital Yuan which makes them to ban crypto like bitcoin. But do you think China will ever support coins like bitcoin? I do not think they can because nothing outside of China are Chinese government supporting, just like social media that they also ban.

Well, for me decentralized is still not becomes an alternative to centralized exchanges because we have to pay more there as trading and transaction fee also cross chain transactions are not possible and also fiat. But people choose to trade on DEX when they are not ready to comply KYC.

Centralized exchanges makes things easier but they owns the keys to your coins which is the reason we have to be very careful while using any centralized exchanges. But I noticed that centralized exchanges have ways to attract customers, many of them are not concerned about privacy, most people can not differentiate between centralized and decentralized exchanges now, many people accept centralized exchanges because they are complying with government laws but no privacy.

[Beparanf]

Well, for me decentralized is still not becomes an alternative to centralized exchanges because we have to pay more there as trading and transaction fee also cross chain transactions are not possible and also fiat. But people choose to trade on DEX when they are not ready to comply KYC.

I think you are pertaining on DEX built on Ethereum not in general. Fee on other like BSC, SOL and Polygon are extremely cheap. The disadvantage I'm seeing on DEX is the ability to trade directly into fiat since Bank needs a KYC for AML requirements. This is the gray which DEX facing right now, At the end of the day, You will still need to find a reliable CEX to withdraw/deposit your fiat.

[RapTarX]

Apart from the benefit of KYC, I guess users will have more stable market as most CEXs are manipulating the market movement. Last night, there was a big drop of BTC to $50k for a while but it was to liquidate the future traders position. If DEXs are mostly used, there will be no party to have our fund on custodial and no one will be able to manipulate the market by our funds. Well, still, there will be whale but without the help of CEX, they will not be able to influence the market much.

[arbifahrozy]

For me the best and easy thing is that they didn't require KYC, I'm not talking about all of the decentralized exchanges but I personally think that most of these exchanges didn't require KYC which is quite easy and simple way of exchange, but there will be more risk of security as compared to binance, it has a strong security even though.

[suzanne5223]

Well, for me decentralized is still not becomes an alternative to centralized exchanges because we have to pay more there as trading and transaction fee also cross chain transactions are not possible and also fiat. But people choose to trade on DEX when they are not ready to comply KYC.

I think you are pertaining on DEX built on Ethereum not in general. Fee on other like BSC, SOL and Polygon are extremely cheap. The disadvantage I'm seeing on DEX is the ability to trade directly into fiat since Bank needs a KYC for AML requirements. This is the gray which DEX facing right now, At the end of the day, You will still need to find a reliable CEX to withdraw/deposit your fiat.

Some people are still unaware of the benefit of the BSC, SOL and Polygon DEX, and other products. However, I think some DEX exchanges on Best Change offer crypto to fiat service though I have used any of it before.

Having said that, the major disadvantage DEX has is a limited list of pair coins.

[snip]
without the help of CEX, they will not be able to influence the market much.

Agreed with you but this is what they always to do benefit themselves so they will always find a way to influence the market.

[Oshosondy]

Apart from the benefit of KYC, I guess users will have more stable market as most CEXs are manipulating the market movement. Last night, there was a big drop of BTC to $50k for a while but it was to liquidate the future traders position.

I do believe this market manipulations on reputable centralized exchange, but this what you are saying is true especially for bitcoin, but bitcoin was never gone down below $50000 yesterday, it did not even go down below $53000, but I have noticed abrupt price increase and decrease within 5 minutes while people with high leverage can easily have their money liquidated.

Market manipulation or not, people that do not leverage and buy will not be affect, the end result will be like people holding their coins on noncustodial wallet, I do not means in term of control but in term of price increase and decrease. But what I know is that no privacy while using centralized exchanges and exchange owners are in total control not the customers.

[Husires]

So, as traders. For you, what is/are the advantage is disadvantages of using decentralized exchange over centralized exchange these days?

Everyone wants low fees, high liquidity, full fee access without KYC > which is perfect decentralized platform but unless cryptocurrencies blockchains can talk to each other there will be a point of failure and the platform may end up being hacked.

The definition of decentralization varies from one person to another. Some link it to KYC, and others link it to the extent to which a party can control the platform.

any way, high volumes, low fees and fast book ranking is what makes Dex perfect.

[King Raymond]

I'll always choose Dex to Cex when doing transactions. Except for security and more trade options on Cexes, there's more freedom, privacy and ease when trading on a Dex. Nobody wants to go through all the complex process before withdrawing their coin on a Cex

[24Kt]

Well, for me decentralized is still not becomes an alternative to centralized exchanges because we have to pay more there as trading and transaction fee also cross chain transactions are not possible and also fiat. But people choose to trade on DEX when they are not ready to comply KYC.

I think you are pertaining on DEX built on Ethereum not in general. Fee on other like BSC, SOL and Polygon are extremely cheap. The disadvantage I'm seeing on DEX is the ability to trade directly into fiat since Bank needs a KYC for AML requirements. This is the gray which DEX facing right now, At the end of the day, You will still need to find a reliable CEX to withdraw/deposit your fiat.

Some people are still unaware of the benefit of the BSC, SOL and Polygon DEX, and other products. However, I think some DEX exchanges on Best Change offer crypto to fiat service though I have used any of it before.

Having said that, the major disadvantage DEX has is a limited list of pair coins.

[snip]
without the help of CEX, they will not be able to influence the market much.

Agreed with you but this is what they always to do benefit themselves so they will always find a way to influence the market.

That is right. You can't expect all the coins that you need to trade will be found in DEX or if ever they have good liquidity.  This is why CEX has still advantage on this part. With long list of choices and if you are choosing top CEXs, you have no problem with their liquidity. Anyway, at the end of the day, just secure your own assets in your wallet. Both types of exchanges have their pros and cons, so just use them wisely. Because at some point, you both need them especially if you are active in this trading market.

[samcrypto]

I’m a trader and honestly, I trade a lot on CEX compare to DEX since the options on DEX is not enough for me to trade and some of the tokens or coins are not available on DEX but the good thing with DEX is that, they didn’t require any KYC and that’s your advantage to remain anonymous.

Well, we heard a lot of good news with DEX since then and Uniswap really making their names on this category, we can also include pancakeswap on the options. If CEX is not available in your play, DEX is the best option for you.

[ZaraCB]

There is no opportunity to buy order or sell order in decentralized exchanges. Here only you can swap your crypto. Many times we hold crypto and wait for the price to rise. In that case you can make a sell order at CEX but not at DEX.

[nelson4lov]

^Snipped

So, as traders. For you, what is/are the advantage is disadvantages of using decentralized exchange over centralized exchange these days?

I've recently fallen in love with trading on DEXs and AMMs and the experience isn't totally different from using a centralized exchange. But my major concern has been whether or not regulators would crack down on decentralized exchanges too. I'm not so sure but there was a time I held uniswap would restrict users from certain jurisdictions. (Not sure if it's true but worth checking out).

[GreatArkansas]

There is no opportunity to buy order or sell order in decentralized exchanges. Here only you can swap your crypto. Many times we hold crypto and wait for the price to rise. In that case you can make a sell order at CEX but not at DEX.

I don't think so, I already experience one on the Solana network. They have this Decentralized Exchange (DEX) called Serum, they have a lot of user interfaces under Serum DEX, if you take a look that DEX, they got a lot of similarities on a normal centralized exchange, there you can see also trading books, you can set limit buy or sell orders too.
For me, the downside is only how fast your every trade transaction is since it is on-chain, so you will need to wait for your transaction to get confirmed.