How Decentralized exchanges are challenging centralized platforms
Centralized exchanges continue to pocket a majority of the trading volume and liquidity in the industry. However, a huge change is happening as Decentralized exchanges are growing fast and getting a large user base. Trading can be done by users without compromising their security and privacy. They offer direct token swapping and work on a liquidity aggregator model.
There are 43 decentralized exchanges in the spot market right now. The leading Decentralized trading platforms are Bisq, Bancor, Binance DEX, Kyber Network, Uniswap, and AirSwap. They are mostly developed on blockchain networks like Ethereum, EOS, and TRON.
The common features in a decentralized exchange script are
- Atomic swapping is available where assets can be exchanged directly by the users without the involvement of any third parties.
- A powerful trading engine that matches the orders with low latency. The accepted orders include market order, limit order, take-profit, and stop-loss orders.
- Users retain full control over their funds and need not hand them over anytime to a central authority.
- There is no chance of any hacking or phishing attacks taking place on the decentralized trading platform.
- There is no possibility of server downtime as it functions using several distributed nodes and does not depend on a single central server. This also reduces the chances of network congestion and gas fees.
- Users can increase their earnings through margin trading facilities by taking short or long positions on their assets.
- Profits are ensured through fair market price liquidation.
- Advanced charts and graphs are displayed to display the market trends.
- Liquidity API is present to ensure the speedy execution of trades by the users.
- Since there is no KYC/AML verification of the users, it ensures a high level of privacy and anonymity.
- The smart contracts automate all the trading operations.
- Integration is provided with different hardware wallets for the safe storage of tokens.
- Crypto tokens can be staked by the users and exciting rewards can be earned.
- They are immune to regulations passed by authorities and governments.
- Access to transaction history is provided for the users ensuring a high level of transparency.
- Real-time notifications carrying information about price changes and market movement is shared with the traders to facilitate better decision-making while investing.
- The security measures include two-factor authentication, end-to-end data encryption, anti-DDoS protection, and jail login.
The detailed process followed in creating a Decentralized exchange
- Analyzing the business requirements of the firm thoroughly.
- Preparing a detailed outline of the project.
- Integrating the blockchain technology and the smart contract into the trading platform.
- Adding all the necessary features and functionalities into the solution.
- Carrying out extensive testing to remove all the technical bugs from the platform.
- Deploying it on the operational network.
- Issuing necessary software updates post-deployment.
Cryptocurrencies are currently in high demand by institutional investors leading to a bullish run in the market. It has completely transformed the global financial system. While centralized exchanges suffer from security issues due to the repeated incidents of hacking attacks, Decentralized platforms need to work on liquidity, adding more functions, and improving the overall user experience.
This is the right time to create your own decentralized exchange due to positive investor sentiment. Users get more accountability and security in managing their digital assets in a trustless manner.
