Dentralized exchanges are decentralized financial (Defi) platforms where cryptocurrency is traded through peer-to-peer transactions in exchange for other cryptocurrency for an equivalent value.
These service providers are not governed by a centralized authority — as opposed to a centralized exchange — and therefore requires no personal information to set up an account as it works purely through connecting one’s hot wallet.
In many ways, this makes decentralized exchanges safer and mitigates the risk of market manipulation and being hacked as there is no transfer of assets to a third party like with a centralized exchange.
Complete decentralization is not possible for the time being as it’s still necessary to use centralized exchanges to initially fund a wallet in exchange for fiat currency, but creators and collectors can benefit from these platforms by being able to:
* high interest Defi products are risky, DYOR before investing
Want to learn more about decentralized exchanges? Check out our review here.