The decentralized market infrastructure develops rapidly. The main goal of DEX platforms is to provide full control over their funds and exchange trading, providing better security and eliminating intermediaries from the exchange chain. Recently, all crypto wallet apps have started to add an exchange function that allows you to exchange crypto assets directly within the apps. This feature was added to the TBCC app as well.
Thus, you can trade tokens within your wallet without having to withdraw funds, which minimizes the fees. With the TBCC app, you can work with decentralized platforms directly, so that you do not have to send funds anywhere, you can trade assets that you have on your balance. This article will explain what DEX is and how to trade in a decentralized market.
WHAT IS DEX?
A decentralized exchange (DEX) is a platform for exchanging digital assets based on blockchain technology. Users of DEX platforms do not have to register an account — they can trade together with other users, using their crypto account in trading on a decentralized platform. Thus, users will not have to trust their funds to the trading platform. Moreover, all transactions made by users of the platform are recorded in the blockchain. In other words, trading transactions on DEX are registered in the same way as regular transactions.
Dex platforms are fundamentally different from platforms with centralized trading operations for the sale and purchase of crypto assets (CEX). The main difference is in the organization and storage of orders, user funds, and the environment for trading transaction execution. CEX, as the name implies, stores users’ funds centrally and issued purchase/sale orders are executed within the platform, all information about which is stored centrally and on the CEX facilities. In other words, central storage is used, there is no distributed execution and decision-making, and as a result, there is no full multi-user and unbiased data validation, which leads to the possibility of conducting illegitimate transactions.
This is a less secure approach, since when the trading platform system is hacked, the damage is caused mostly not to the company but to the users who provided funds to the platform and conducted trades on it. In other words, when you top up the exchange’s balance, you trust your funds to the platform and have to worry more about the platform’s security than think about attracting additional funds and earning opportunities.
The concept of decentralized platforms is quite different: you do not have to top up the platform’s balance to trade. All you need to do is create an account on the blockchain protocol you are interested in, top it up with cryptocurrency and register it on the DEX platform. After that, you can start conducting trading operations and form and close orders.
On the same account, you will store funds, and the crypto assets received via a decentralized exchange platform are immediately transferred to your crypto account. You can use funds that are already stored in your account. No one else can get access to your coins, including the exchange itself, since the private key belongs only to you. However, if you lose your private key, or it is compromised, you may lose your funds — this is the price for freedom blockchain provides.
Now you understand the fundamental differences between decentralized and centralized trading platforms. Next, let’s look at the differences in more detail.
WHAT IS THE DIFFERENCE BETWEEN DEX AND CENTRALIZED PLATFORMS
Decentralization is one of the main characteristics of cryptocurrencies and one of the necessary conditions for their existence. But it took a long time before decentralized services began to develop: exchange platforms, applications, etc. Prior to that, services were exclusively centralized, which limited the potential of cryptocurrencies. But with the development of DEX platforms, everything has changed: now users can control not only the storage, but also the exchange of crypto assets. But decentralized sites at the present time has its drawbacks:
- The exchange rate is limited by the capacity of the network. Of course, the blockchain is developing further and further, and the bandwidth of decentralized networks is increasing, which makes it possible to process transactions faster. But for now, DEX is inferior to centralized exchanges.
- There are problems caused by the need to increase the computing resources of the trading platform. Since all operations are validated and verified within a distributed computing network, increasing resources on a single node will not affect the speed of the entire node system, but if the increase and expansion of resources occurs within the entire network, its capabilities will be greatly expanded, but this process is very expensive and almost impossible, since most nodes do not belong to a specific organization. Centralized platforms can easily increase computing power to provide faster computing and decision-making speeds.
- Inconvenience. Centralized sites are more convenient to use. Technical features of DEX make the trading process more complicated.
- Limited number of trading instruments. CEX exchanges provide a wide range of tools, such as margin trading with leverage, futures and perpetual contracts, options, etc.
- Low liquidity. In centralized systems, liquidity is provided by exchanges, and in DEX — only by users themselves.
But centralized trading platforms also have disadvantages related to the security of funds, which carries high risks for users. Of course, exchanges are improving security, improving servers and improving security measures, but this does not guarantee complete security, and users still have to trust their funds to the platform.
DEX aims to meet the basic needs of users and crypto traders: autonomy and security. Let’s list the main advantages of decentralized platforms:
- High security of user funds. Using DEX, you get full control over access to funds via private keys. All funds are managed from an account registered in the DEX platform, which is used for trading and other operations performed by the user.
- Privacy. Cryptoaccounts do not require verification. Users do not provide any personal information to DEXes.
- Decentralized exchange.DEX servers are classic blockchain nodes that are part of the blockchain network at startup and operation, which provides a secure and verified mode of operation, and confirmation, modification and writing data to the blockchain occurs only after passing and successfully completing the consensus stage, which makes it possible to minimize the risk of unauthorized management of user assets. This corresponds to the principles of the network, according to which cryptocurrencies are arranged, which significantly increases security and allows to prevent hacking and theft of users’ funds in every possible way. Hacking such systems will be extremely problematic using current approaches and capabilities. To conduct a full-fledged attack on such systems, it is necessary to spend not only large computing resources to intercept and manage the chain confirmation in the pow consensus, but also large amounts of financial assets to purchase a large amount of native protocol coins to gain control over the POS-type consensus.
- Sovereignty. Centralized platforms are forced to comply with the rules and requirements of financial regulators, which imposes its own restrictions on trading. DEX exchanges are not subject to external economic and political interaction, so they are more democratic. DEX do not have a single control center on either the technical or administrative side, so they can be used by users from all over the world without any restrictions for trading assets, but as citizens of a particular subject or territory, they are required to comply with the regulations and rules that apply in this territory.
HOW THE TBC CRYPTOCURRENCY APP CONTRIBUTES TO THE DEVELOPMENT OF THE DEX ECOSYSTEM
Modern applications extend their functionality to provide users with the functionality that lies at the аoundation of cryptocurrencies and blockchain technology. Therefore, the TBCC application provides support for exchange on DEX platform.
The TBCC app supports a variety of cryptocurrencies and tokens that you can trade on available DEX platforms. By registering on a decentralized exchange, you can quickly exchange any crypto asset, without having to top up the user account in the system and waiting for the time of crediting this asset to the user’s account, as it happens when using the deposit system of centralized platforms.
TBCC platform continues to work on the development of decentralized exchange and increase the number of methods: from basic asset trading to exchange using advanced tools for working with orders, supported by decentralized trading platforms.
ADVANTAGES OF THE TBCC APPLICATION FOR TRADING ON DEX
The TBCC app has many advantages due to advanced crypto wallet features for managing digital assets. Let’s see what advantages the TBCC app offers to its users.
CONVENIENCE
The app is easy to use and has a user-friendly interface that is easy for any beginner to understand. TBCC strives to make the process of working with cryptocurrency as simple and efficient as possible.
FUNCTIONALITY
The application has a wide functionality, thanks to which its capabilities are not limited only to displaying crypto assets stored on the balance of an account that is registered on the DEX platform. You can perform any operations with assets on your balance directly from the app, which greatly simplifies working with DEX platforms and expands the range of use. As the TBCC infrastructure develops, the app’s functionality will expand as well.
MOBILITY
The application is available on mobile platforms, so you get quick access to funds from anywhere in the world with the ability to perform any trading actions.
CRYPTOCURRENCY PURCHASE
You can not only top up your account balance with coins, but also buy cryptocurrency directly in the app using credit and debit cards, bank transfers, and electronic payment systems.the purchased crypto asset will be automatically credited to the app user’s balance.
PRIVACY
Users do not provide their personal data, which ensures high confidentiality of funds, so you can make transactions on DEX platforms anonymously.
SECURITY
Only the users themselves have access to the wallet. Only they own private keys, without which access is impossible. There are other options to enhance security: you can protect your wallet with a password or Touch ID.
LOW TRADING FEES
The fee on DEX platforms is significantly lower than on their centralized counterparts, since the fees are set by the blockchain, which does not require high fees due to the lack of intermediaries who bear the operating costs for servicing the exchange.
WIDESPREAD INFRASTRUCTURE
DEX platforms have many users who use various cryptocurrency wallet applications. This provides a large flow of users and creates liquidity for decentralized exchange by trading between them.
SUPPORT OF MULTIPLE LANGUAGES
The TBCC application interface allows you to select different languages. The platform aims to expand its infrastructure to support as many users as possible around the world.
HOW TO TRADE USING THE TBCC APP
The ability to exchange crypto assets appeared long before the foundation of the first DEX platforms. Even then, users could exchange assets within the app. Here we will talk about two main ways that users can convert crypto assets: swap and regular exchange.
SWAP
Asset swap is the simplest cryptocurrency exchange. This approach allows you to exchange cryptocurrencies between different blockchains according to pre-defined rules. This process is also called cross-chain exchange. Just select a pair of crypto assets that you want to exchange and make a deal as soon as there are counter offers.
EXCHANGE
The exchange via DEX is built on top of the token swap. The exchange takes place using a similar procedure on centralized platforms: using open orders. With this method, users can view charts and other trading tools for the purpose of analyzing exchange indicators, which provides the necessary minimum set of tools for users-traders.
Using the TBCC application to perform operations through the DEX platform, the application user gets all the advantages of decentralized exchange, especially such as privacy and security. The user also has full control over their crypto assets and uses all the usual functions provided by centralized exchanges: configuring charts, placing orders, viewing trading history, information about trading volumes, and other trading tools. This way you have more control over exchange transactions, higher security, and the same wide range of exchange tools for analyzing market behavior. At the same time, the process itself remains familiar for those who already have experience of trading on centralized exchanges.
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