With cryptocurrency continuing to rise in terms of users, crypto trading has also become much more prevalent. One of the ways users can buy and sell cryptocurrencies from one another is through a decentralized exchange (DEX). According to Dan Schatt and Domenic Carosa of the social-first crypto platform and marketplace Earnity, a decentralized exchange provides many advantages for users because its decentralized nature eliminates the need for a broker or financial intermediary.
DEX transactions are facilitated through smart contracts, automated agreements between the creator of a contract and the receiving party. The self-executing agreement becomes immutable and irreversible since it is written in code and embedded into the blockchain. And because there are no middlemen between trades, regular people can directly do business with each other. On top of that, fees are typically much lower than centralized exchanges.
Unlike centralized exchanges, DEXs do not require a trader to sign up or even have an email address. Instead, users only need a crypto wallet compatible with the smart contracts on the exchange’s network. This means that anyone with a smartphone or mobile device and an internet connection can interact with a DEX platform.
To trade via DEX, a user has to decide which network they plan on using and select a wallet compatible with that network. The wallet then has to be funded with its native token, which will be used for the intended trade and pertinent transaction fees.
Using and learning about decentralized finance (DeFi) tools and apps can still be enormously complicated, especially since the technology is still in its infancy stage. Dan Schatt and Domenic Carosa aim to help users learn more about it through the Earnity platform. It is designed to make crypto and DeFi more approachable and intuitive to allow users to participate and access industry-standard DeFi projects and protocols easily.
