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DEX (Decentralized Exchange):

Updated: Dec 23, 2021

If you remember Robinhood meme stocks drama in January 2021, you would understand how easily retail investors were blocked from trading/asset transfers. Retail investors were blocked out of trading these assets while venture funds had a free ride. DEX's solve this problem.


To interact with DEX's, all you need is a personal wallet (hardware, software) and funds to trade. There is no need for centralized middle layer solutions like Robinhood, NYSE etc).


Here are the features provided by DEX's:


Companies ->Companies need not to go through 1000 page dossier to get listed. Companies can create a token and attract liquidity.


Users ->Trade, provide liquidity, store assets in personal wallet or move to other DeFI protocols such as lending, borrowing, derivatives etc..


Pros:

Retail investors can be market makers.

Users have full control over the assets they own.

Retail can participate in all the financial instruments which were preciously only available to Wall street fund managers.

Users can see live onchain activity if whales are buying/selling shares.


Cons:

Users are required to do all the due diligence on what assets they trade.

Token pump and dump schemes.

Defi smart contract hacks.



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