Decentralized Exchanges Vs Centralized Exchanges

[lalabotax]

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

Both have their advantages and disadvantages.
For me, I prefer to use centralized exchanges moreover that have a top reputation.
I know that it may be also risky moreover if related to the KYC requirement. I actually don't like this but cannot do anything because so far, using this exchange is easier, quicker, has more options, and also more trusted.

In some DEX, I only use them if the tokens that I got are only listed on those exchanges and then send the results to the cex.

[barbara44]

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?

Both have their own good and bad. Although one thing that people are going to like about decentralized exchanges is the fact that there is nothing like KYC compliance, you can trade as much as you want to trade without any restrictions at all and no KYC.

Unlike centralized exchanges where you will have to do KYC and go through all those stress and still face some restrictions, because they are controlled by the government. But decentralized exchanges are usually not that easy for newbies to grab, it is not as easy as Centralized exchanges, it is going to take them time to understand.

[BD Crypto]

In my point Of view Decentralized Exchanges are the best to use for trading cryptocurrency.In China we saw that many Centralized exchanges are not working and there Decentralized Exchanges are being popular in recent time.Because it gives an user highest security of his funds and privacy too.
But To be true Centralized Exchanges are very easy to use and have higher liquidity in market.
So both exchanges have advantages and disadvantages.And basically both are good with their features.
We can easily know in details about Centralized and Decentralized Exchanges with full comparison from this Article

[leea-1334]

Unlike centralized exchanges where you will have to do KYC and go through all those stress and still face some restrictions, because they are controlled by the government. But decentralized exchanges are usually not that easy for newbies to grab, it is not as easy as Centralized exchanges, it is going to take them time to understand.

Not necessarily,,, until only recently you could still go without KYC on some CEXs like Binance and Bittrex. These are not controlled by the government either,,, but by private companies.

Some "DEXs" are also much easier to use. I remember Waves DEX from before, you could use it in blink of an eye,,, unlike Binance even now can be so hard to use with 100s of options.

[cheezcarls]

CEXs and DEXs have their respective pros and cons. However, ever since I’ve started getting into cryptocurrency, I mostly trade on CEXs and a little bit on DEXs. I like the fact that CEXs does have lower fees and faster executions than DEX, but we don’t have the full custody of our coins and tokens due to the fact that they don’t offer seed phrases or private keys. Plus, KYC is mandatory in most CEXs because of complying with the country regulators.

[smartaction]

Now a days Decentralised exchange much popular and the potential investors always choice Decentralised exchange for exchange there crypto. Coz there are no need kyc verification for trading. Here people can exchange unlimited amount without any kyc. But centralized exchange need kyc for big amount withdrawal. so, the big investors didn’t like centralized exchange. so, in my opinion i think Decentralised exchanger is better then centralized exchange

[RealMalatesta]

Unlike centralized exchanges where you will have to do KYC and go through all those stress and still face some restrictions, because they are controlled by the government. But decentralized exchanges are usually not that easy for newbies to grab, it is not as easy as Centralized exchanges, it is going to take them time to understand.

Not necessarily,,, until only recently you could still go without KYC on some CEXs like Binance and Bittrex. These are not controlled by the government either,,, but by private companies.

Some "DEXs" are also much easier to use. I remember Waves DEX from before, you could use it in blink of an eye,,, unlike Binance even now can be so hard to use with 100s of options.

Controlled as in KYC, I am sure he didn't mean controlled by government as in exchanges. You give your KYC, then that exchange will that KYC to government or put it on a database or something just in case you are a bad person, and then government will control that. All in all swaps are good but they are not enough, CEX will always survive as long as we need to deposit fiat or withdraw fiat to our bank accounts.

Without CEX there is no way I could turn my crypto to fiat and get it in my hands, and sometimes we need that as well. Don't get me wrong, swaps are getting bigger and bigger, it is something that is amazing and I support them, but it doesn't mean that they are "enough", they are great at what they do, but they have stuff they do not provide which we need.

[leea-1334]

Some "DEXs" are also much easier to use. I remember Waves DEX from before, you could use it in blink of an eye,,, unlike Binance even now can be so hard to use with 100s of options.

Controlled as in KYC, I am sure he didn't mean controlled by government as in exchanges. You give your KYC, then that exchange will that KYC to government or put it on a database or something just in case you are a bad person, and then government will control that. All in all swaps are good but they are not enough, CEX will always survive as long as we need to deposit fiat or withdraw fiat to our bank accounts.

Without CEX there is no way I could turn my crypto to fiat and get it in my hands, and sometimes we need that as well. Don't get me wrong, swaps are getting bigger and bigger, it is something that is amazing and I support them, but it doesn't mean that they are "enough", they are great at what they do, but they have stuff they do not provide which we need.

But that is not true. The government has no deal in this KYC business,,, you should understand that as your right.

Exchanges do KYC because financial law requires them to identify their customers and make sure that they are not law-breaking people or people the country they operate in does not recognize as unlawful.

They will report people they find to the government but the identities of their customers are not automatically given or controlled to their governments. In some places like Europe this is even illegal. Control of KYC data now is a very touchy subject and the government has no right to control or even access it without a justification.

But I agree DEX (or non custody swaps are more accurate) are really good, but I always feel like a big hack or breakdown is coming.

[Victorycoin]

Decentralized exchanges are generally known to be safer than centralized exchanges also a users private keys are stored on centralized exchanges and a loss of funds can occur if the platform is attacked. It is worth noting that centralized exchanges have recorded more than 56 cyberattacks over the past decade, according to a report by the wall street journal, with decentralized exchanges users are responsible for keeping their private keys so that it is less favorable to target hackers.

[o_e_l_e_o]

Without CEX there is no way I could turn my crypto to fiat and get it in my hands, and sometimes we need that as well.

Yes there is. There are multiple good DEXs which support fiat to bitcoin (and fiat to a handful of major altcoins like Monero and Ethereum) trades. Bisq and LocalCryptos are the two most popular. You can see a list of good decentralized exchanges here, which will tell you which ones support fiat trades: https://kycnot.me/

But I agree DEX (or non custody swaps are more accurate) are really good, but I always feel like a big hack or breakdown is coming.

Why? A real DEX in which you never deposit your coins to a centralized wallet and which you never have to part with your KYC details are significantly safer than centralized exchanges. They cannot be hacked for your coins or your data when they don't have access to either of them in the first place.

[leea-1334]

But I agree DEX (or non custody swaps are more accurate) are really good, but I always feel like a big hack or breakdown is coming.

Why? A real DEX in which you never deposit your coins to a centralized wallet and which you never have to part with your KYC details are significantly safer than centralized exchanges. They cannot be hacked for your coins or your data when they don't have access to either of them in the first place.

Well,,, there was an example of Polygon network (not Polygon Matic another one) a few months back that got hacked, it was running its own dex and layer2 I was not exactly sure but in the defi space. A lot of people who locked their tokens in pools there got their money stolen, including wrapped eth and usdt IIRC.

That is the security or hack or whatever it is called I worry about. And you said a real DEX would never make this happen which is true but which DEX is real in the space now right? Uniswap is not a true DEX and definitely Pancakeswap is not. In theory they can all block or delist tokens from their exchanges, making it 0 value.

[bamb]

The first advantage of decentralized exchange is the same vision of bitcoin of been your own bank.  Decentralized exchange enable you to trade and participate in defi activities without putting your fund in the hand of third party.  You have control over your fund, you are your own bank.  This is the most important advantage of decentralized exchange over centralized exchange!

[o_e_l_e_o]

A lot of people who locked their tokens in pools there got their money stolen, including wrapped eth and usdt IIRC.

There's your issue. They may call themselves a DEX, but they are requiring people to deposit their coins to centralized pools or other smart contracts which have been poorly written and are filled with bugs, and the people depositing their coins either can't or don't review the code themselves. There are far too many projects out there which call themselves decentralized when they are nothing of the sort, simply as a marketing gimmick.

And you said a real DEX would never make this happen which is true but which DEX is real in the space now right?

I would repeat what I said above: Bisq and LocalCryptos are the two best DEXs at the moment.

[goldkingcoiner]

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?

Centralised = Not your keys, not your coins. Thats the biggest issue. The second biggest issue is the KYC. Who knows where your info goes? Thirdly, exchanges like Binance with chinese roots are the SECOND MOST dangerous next to low volume/new exchanges. I would not trust anything coming out of China at all.

Decentralised = Your Keys, Your Coins. Full control of your wallet but if someone hacks you and finds your seed phrase/private key then probably nobody will be able to get your money back. Especially since you didn't connect it to a KYC therefore, you can't prove it's yours. Also the fees for swapping on DEXs are quite absurd. Although that will change in the near future.

[nhaila]

Decentralized exchange fully controlled by users only, but centralized exchanges control by authorities. Kyc systems mandatory for only centralized exchanges but most of the biggest investors don't prefer to kyc . I prefer decentralized exchanges excluding uniswap. Case uniswap has a huge amounts of excessive Ethereum network fees.

[Hamphser]

Decentralized exchange fully controlled by users only, but centralized exchanges control by authorities. Kyc systems mandatory for only centralized exchanges but most of the biggest investors don't prefer to kyc . I prefer decentralized exchanges excluding uniswap. Case uniswap has a huge amounts of excessive Ethereum network fees.

The word itself would be enough for someone to distinguish the difference of the two which is clear as day that DEX isnt really controlled by someone but only yourself not like when you are dealing with centralized
platforms which the exchange itself is the ones who had the hold of your coins or totally centralized thats why some people doesnt really like that way and do stick out with dex platforms

but the biggest hassle that you could have when dealing with DEX is that you wont really have the chance on dealing with Fiat which most people been preferring when it comes to conversion.
Thats why majority of us doesnt have a choice but do deal with CEX.

At least we do have some options to take rather than on having one.

[RealMalatesta]

Without CEX there is no way I could turn my crypto to fiat and get it in my hands, and sometimes we need that as well.

Yes there is. There are multiple good DEXs which support fiat to bitcoin (and fiat to a handful of major altcoins like Monero and Ethereum) trades. Bisq and LocalCryptos are the two most popular. You can see a list of good decentralized exchanges here, which will tell you which ones support fiat trades: https://kycnot.me/

That is not fiat, that is basically stablecoin, it doesn't send it to my bank account, so it is no different to having USDT or BUSD or USDC or whatever you want to name it. The problem here is that CEX would be able to send the money into my bank account in fiat, that's still not a thing in dex, you need a bank account to send money to my bank account and if there is a bank account that could send money to me that means it is not decentralized.

Having fiat trade is not the exact thing as having fiat sent to your bank account and that was the main topic of my post, not that you can't trade fiat, because you can do it with USDT for nearly 4 years now, it is about sending fiat to bank account, that's the key point here.

[leea-1334]

A lot of people who locked their tokens in pools there got their money stolen, including wrapped eth and usdt IIRC.

There's your issue. They may call themselves a DEX, but they are requiring people to deposit their coins to centralized pools or other smart contracts which have been poorly written and are filled with bugs, and the people depositing their coins either can't or don't review the code themselves. There are far too many projects out there which call themselves decentralized when they are nothing of the sort, simply as a marketing gimmick.

And you said a real DEX would never make this happen which is true but which DEX is real in the space now right?

I would repeat what I said above: Bisq and LocalCryptos are the two best DEXs at the moment.

I totally agree and think Bisq and Localcryptos are the closest that you can ever get to a true DEX,,, but to be fair to Uniswap and Pancakeswap, they are also non custody DEXs and their coding is mostly (to my understanding) open source anyway,,, so if the smart contracts are poor, then anyone who knows coding should be able to discover it but the fact is that Localcryptos and Bisq have probably far better devs. And we can never say for sure if they cannot be hacked, like most hacks, they lie in place for years and only until the hacker gets a good volume or a hack that is worth it does he/she trigger the theft.

I cannot review code myself and have no idea and I am sure most people are like me. So for majority of people, we cannot understand and never can make a true comparison from DEX to DEX (by name or by trait).

[o_e_l_e_o]

That is not fiat

Yes it is.

that is basically stablecoin

No it isn't.

it doesn't send it to my bank account

Yes it does.

The problem here is that CEX would be able to send the money into my bank account in fiat, that's still not a thing in dex

It absolutely is. I've been trading on DEXs with fiat from my bank account for years now, since before most centralized exchanges like Binance even existed. Yes, there are a bunch of DEXs which aren't really exchanges at all but simply coin swapping platforms, but there are also DEXs like the two I've mentioned above which let you trade using bank transfers, bank wires, cash, money orders, and a bunch of other fiat methods. See the following links:
https://docs.bisq.network/payment-methods
https://localcryptos.com/payment-methods

you need a bank account to send money to my bank account and if there is a bank account that could send money to me that means it is not decentralized.

It means the fiat side of the trade is centralized, as all fiat trades will be unless you trade in cash. The crypto side of the trade remains decentralized.

[Wind_FURY]

The main disadvantage of decentralized exchanges is, it is less liquid than most centralized exchanges. Consistent high slippage will definitely be a big problem for an active trader. It’s acceptable, if you buy cryptocurrencies once a month only for HODLing.