1.1 DEX VS Centralized Exchange

The different characteristics of the centralized Exchange and Decentralized Exchange (DEX) are mainly reflected in the following aspects:

Asset control is different

In the Centralized Exchange, the user assets are controlled by the centralized Exchange. Users need to recharge their assets to the platform's trading wallet.The asset custody function of the centralized trading platform is just like the bank. The user puts the money in the bank. The bank gives the user an account number to record the user's funds, and the bank has absolute control over the user's funds.

In DEX, users' assets are completely controlled by their own.DEX does not provide fund custody services, so it cannot control and transfer users' funds.

The risk of capital is different

The wallet of the Centralized Exchange stores the funds of all users. Due to the large amount of funds, it is easy to attract hackers, and it is also common to stick to the self-theft and even the Exchange runs away.

The security risks relative to the Centralized Exchange come from hacker attacks and the platform running away, and almost all users will suffer losses; the asset risk of DEX users mainly comes from the improper management of the wallet private keyThe leakage of a user's private key will not affect the asset security of other users.Assets between users are completely isolated.

Transaction transparency is different

Transactions between transactions between users of the Centralized Exchange are completed by the transaction platform, transaction information is only recorded in the internal ledger of the Exchange, not on the untampered block-chain, so transactions of the Centralized Exchange, also known as subchain transactions (Off-Chain), the transparency of transaction records is relatively low. If the transaction platform wants to do evil, the cost of tampering with transaction records is very low. And the DEX, the transaction between users is completed on the blockchain, and their transaction will be packaged by miners and broadcast on the blockchain, So the DEX transaction is also called the chain transaction (On-Chain).Transaction information on the chain means that the transaction infor-mation can be publicly inquired on the block-chain, and cannot be tampered with, so the DEX transaction information is more secure and transparent

The trading experience is different

Centralized Exchange, because the trans-action data is not in the chain, so as long as there is a matching opponent order, the trans-action speed is very fast.At the same time, the operation steps of the Centralized Exchange are simple, with low use threshold, and can provide rich trading pairs, so more users will choose the Centralized Exchange, and more users will have a better trading depth, which further promotes the transaction speed of the Centralized Exchange orders.

DEX trades slowly because the transaction data needs to be linked, and the transaction confirmation needs to wait for the miners to pack and broadcast.The DEX operating steps are relatively complex, with higher barriers to use.When it comes to different blockchain asset transac-tions, such as Bitcoin and Ethereum transac-tions, more complex cross-chain technology should be used, and many DEX trading plat-forms cannot be realized, so fewer transactions are supported compared with Centralized Exchange.